USD/CAD Daily Fundamental Forecast – April 25, 2017

Traders continued to push the USD/CAD higher on Tuesday in reaction to yesterday’s decision by the U.S. government to impose tariffs on Canadian exports of softwood lumber.

According to Reuters, U.S. Commerce Secretary Wilbur Ross said on Monday that anti-subsidy tariffs averaging 20 percent would be imposed, affecting $5 billion worth of imports of softwood lumber from Canada.

Canadian government data, showed that in total, Canada exported around $8.6 billion Canadian Dollars or around $6.37 billion U.S.

In 2015, the U.S. imported a total of $325.4 billion in goods and services from Canada.

The rally by the USD/CAD could continue over the longer-term because the tariff on lumber may be only the first aggressive move by the United States government. According to reports, the Trump Administration may also be planning to go after dairy products, for example.

Any further escalation of tariffs could put more pressure on the Canadian Dollar.

The daily chart also indicates the current rally could gain traction if buyers can sustain the rally over 1.3575. It also indicates the Forex pair may have a clear shot at the next major resistance target at 1.3838.

A break back below the old top at $1.3534 will indicate that perhaps the buying isn’t that strong.