The USD/CAD pair posts a fresh two-month high near 1.3870 on Friday. The Loonie pair strengthens as an increase in the tariff rate announced by United States (US) President Donald Trump on imports from Canada has weakened the Canadian Dollar (CAD).
On Thursday, US President Trump unveiled a list, dictating tariff rates for nations that have failed to reach a deal with Washington during the deadline period. Trump imposed 35% additional duty on imports from Canada, which are higher than 25% stated in the mid of July.
In response, Canadian Prime Minister Mark Carney has said during the late Asian session that the government is disappointed with the US on the fresh tariff rate, while confirming that negotiations with Washington are still going on.
Meanwhile, the US Dollar (USD) trades firmly as traders have pared Federal Reserve’s (Fed) interest rate cut bets for the September policy meeting.
In Friday’s session, investors will focus on the US Nonfarm Payrolls (NFP) data for July, which will be published at 12:30 GMT.
USD/CAD strengthens after a breakout of the Accumulation phase formed in a range between 1.3540 and 1.3800 in past seven weeks, which often leads to a strong bullish trend.
Upward-sloping 20-day Exponential Moving Average (EMA) near 1.3730 suggests that the near-term trend is bullish.
The 14-day Relative Strength Index (RSI) shifts inside the 60.00-80.00 range, indicating a strong bullish momentum.
Going forward, an upside move by the pair above the May 21 high of 1.3920 would open the door towards the May 15 high of 1.4000, followed by the April 9 low of 1.4075.
On the contrary, the asset could slide towards the psychological level of 1.3500 and the September 25 low of 1.3420 if it breaks below the June 16 low of 1.3540.
