The Canadian Dollar (CAD) is marginally stronger but remains within recent trading ranges. The US Dollar (USD) is noted to be overvalued, attributed to ongoing tariff uncertainties.
Technical signals suggest a modestly bearish outlook for the USD following its failure at 1.44 last Thursday. Should the USD drop below 1.4340/50, losses could extend to the 1.4300/10 support level, while resistance is firm at 1.4400/10 and 1.4520/30.
Election Impact On Markets
The recent election call by PM Carney, set for April 28th, adds to market dynamics, leaving the CAD unlikely to gain until tariff risks become clearer.
The Canadian currency has edged higher but is not breaking out of its established boundaries. That suggests traders are unwilling to commit to stronger moves without more clarity. At the same time, the American currency appears stretched, with trade policies still hanging over sentiment.
Technically speaking, the failure around 1.44 last week hints at a softer trajectory ahead for the American unit. A dip beneath 1.4340/50 could open the door to further declines, particularly towards the 1.4300/10 area where buyers may feel more comfortable stepping in. On the other hand, rallies face hurdles at 1.4400/10, with an even tougher barrier at 1.4520/30 if an upside attempt gathers pace.
From a political standpoint, Carney’s decision to set the vote for 28th April introduces another layer of uncertainty. Investors are unlikely to reward the domestic currency while trade tensions loom in the background. For now, caution dominates, with traders watching how tariff developments unfold before making stronger bets.
Short Term Market Outlook
Short-term movements will likely depend on whether the American unit can maintain its foothold near current levels or if downward pressure takes hold. Those positioning in the derivatives space should balance these chart signals with policy shifts, keeping an eye on how broader market sentiment reacts in the days ahead.
