USDCAD to head towards 1.39400 after rebounding from 1.38200

The USDCAD currency pair tested the support level of 1.38200 on Tuesday and Wednesday this week. On April 23 the price rebounded from the level. As of this writing today, April 25, the pair is trading at Wednesday's closing price. 1.38200 remains the support level, while 1.39400 has turned into a resistance level. The price is to head toward the latter after rebounding from 1.38200. The cyclical nature of the chart also indicates this.

The moving average convergence and divergence (MACD) indicator is below zero on the daily chart, but it has already got a boost to turn upwards. The MACD indicator on the 4-hour chart is also crossing zero upwards. 

The Relative Strength Index (RSI) is 24 on the daily chart, close to the oversold zone and indicating a significantly weakened desire of market participants to sell the asset. The RSI is 58 on the 4-hour chart, which indicates a buying tendency. 

The Canadian dollar fell under pressure following US President Donald Trump’s comments on Wednesday. Trump assumed that 25% tariffs on Canadian automobiles could be raised, reaffirming his commitment to securing a trade deal with Canada. The purpose is to bolster US auto production and lessen dependence on foreign vehicles.

The US dollar is supported by Treasury Secretary Scott Bessent’s comments about a probable de-escalation of trade tensions with China. Additionally, the White House reported on the progress in talks on lowering large-scale tariffs. White House spokeswoman Karoline Leavitt states that 18 countries have already submitted trade proposals, with meetings with representatives of 34 more nations expected soon. These developments signal a softening stance on trade policies from Washington. 

The following trading strategy may be suggested: buying at the current price with Take Profit at 1.39400 and Stop Loss at 1.38200.