USDCAD falls on rising oil prices and Trump's tariff threats

The USDCAD currency pair fell 2.13% to 1.37171 by June 3, down from its May high of 1.40148. On June 4, the pair is trading near yesterday’s closing price and not far from the support level of 1.37000. In two trading weeks, the pair tested this level three times and got a rebound. The resistance level is at 1.38300. 

The Moving Average Convergence Divergence (MACD) indicator is negative on the daily timeframe, pointing to actively strengthening bearish momentum. The 4-hour MACD indicator is also in the negative zone and maintains USDCAD selling momentum.

The Relative Strength Index (RSI) is at 26 on the daily timeframe, highlighting the prevalence of short positions over long ones and strong investor sentiment to sell USDCAD. The RSI stands at 35 on the 4-hour chart. The index rose to this level from the oversold zone, which it promptly fell to in four trading sessions.

Both indicators confirm each other and suggest that a USDCAD downtrend has been formed.

The Canadian dollar is strengthening against its US counterpart due to rising crude oil prices, which the Loonie is heavily dependent on. The Bank of Canada’s interest rate decision and US ISM Services PMI will be the main drivers later today. 

US President Donald Trump planned to double tariffs on steel and aluminum starting today. The Trump administration has asked US trading partners to submit their best offers, as it seeks to finalize the deals by July 8.

Concerns over tariff threats continue to undermine the US dollar. Federal Reserve (Fed) officials on Tuesday advocated for a cautious approach to monetary policy in light of high uncertainty and stagnation risks for the US economy.

Trading strategy option: sell at the current price with a Take Profit at 1.36100 and a Stop Loss at 1.38100.