EURUSD, USDCAD: Markets on Edge Ahead of Concrete Trump Policies

Article Outline

• Key Events: Canadian Retail Sales, Trump Speech, PMIs, BOJ Meeting
• Technical Analysis: EURUSD, USD CAD (3-Day Time Frames)

With Trump’s tariff policies, combined with future negotiations, the Euro and CAD markets are on edge, testing critical lows. Trump is expected to deliver a speech today at the World Economic Forum, and the currency market is tracing a sideways range near these critical lows, against the backdrop of the strength of the US Dollar Index.

While extreme market conditions hint at possible rebounds, any indication of further US inflation risks could push the currency markets down even further. Changing tariff quotas are currently supporting a market range, as possible delays, deals, and negotiations may unfold.

Key Events for Volatility Risks:

• Canadian Retail Sales
• Trump’s Speech at the WEF
• UK, EU, and US PMIs (Friday)

Technical Analysis: Quantifying Uncertainties

EURUSD Analysis: 3 – Day Time Frame – Log Scale

Source: Tradingview

EURUSD is maintaining its stability against the dollar, challenging the 1.0450 high as it attempts to proceed with a bullish rebound. Long-term levels remain intact, with the key level of 1.0170 providing solid support before further bearish scenarios toward parity and 0.98. Short-term support levels may be found at 1.0340. On the upside, the euro’s trajectory is expected to align with 1.0520 and 1.0620.

USDCAD: Monthly Time Frame – Log Scale

Source: Tradingview

USDCAD is holding near 5-year highs, with the potential for a bull trend extension toward the 1.520 and 1.560 resistance levels. These levels align with the trendline connecting the consecutive highs between 2009 and 2020. A failure to break above the 1.47 resistance could result in a pullback, with support levels at 1.390-1.38 and 1.3240, respectively. These levels align with the trendline connecting consecutive higher lows between 2011 and 2021.

Written by Razan Hilal, CMT

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