- The USD/CAD outlook indicates a slight rebound in the dollar.
- All eyes are now on the looming August 1 tariff deadline.
- The European Union is planning a tariff retaliation.
The USD/CAD outlook suggests a slight rebound for the dollar as traders await updates on tariffs. The greenback fell on Monday amid uncertainty about ongoing trade talks. At the same time, market participants were concerned about the Fed’s independence amid the continuing conflict between Trump and Powell.
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All eyes are now on the looming August 1 tariff deadline. Talks between the US and its trading partners are dragging on, and hopes of more trade deals are fading. The European Union is already planning a retaliation, indicating that officials are not confident an agreement will be reached before the new deadline.
A retaliation would mean a trade war that would further slow down the US economy. This would put pressure on the Fed to lower borrowing costs, putting pressure on the dollar.
Meanwhile, Canada may face a 35% tariff on its goods if no deal is reached by the deadline. Such an outcome would have a significantly detrimental impact on the economy. However, at the moment, traders are still hoping for a deal or an extension past the deadline.
Elsewhere, the conflict between Trump and Powell might simmer on, especially after an upbeat US inflation report. Bets on a Fed rate cut have dropped, and the central bank may remain cautious. This conflict has raised concerns about the central bank’s independence.
USD/CAD key events today
Traders do not expect any key economic reports from Canada or the US. Therefore, focus will remain on trade developments.
USD/CAD technical outlook: Bears near the 1.3650 support

On the technical side, the USD/CAD price has broken below the 30-day simple moving average (SMA), indicating a bearish shift in sentiment. At the same time, the RSI has dropped below 50, showing stronger bearish momentum. The change came after the price failed to break above the 1.3750 resistance level.
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Initially, bulls took control by pushing the price above the 30-day simple moving average (SMA). However, soon after that, momentum faded and bulls stopped making big swings. Instead, the price stuck close to the 30-SMA. Bears finally took charge when the shallow uptrend paused near the 1.3750 resistance.
Nevertheless, USD/CAD must push lower to confirm a new downtrend. This means retesting the 1.3650 support level. A break below would solidify the downtrend and clear the path to the 1.3575 support.
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