• USD/CAD strengthened on Monday as markets digested new U.S. tariffs on Canada and awaited further details on Iran-related sanctions.
• The U.S. imposed 50% tariffs on some Canadian goods on Saturday, after the two neighbors failed to reach a trade deal.
•President Donald Trump threatened to raise U.S. tariffs on Canadian cars, trucks and auto parts to 50% from January 1, 2027, escalating trade tensions after talks broke down last week.
•The escalation threatens to disrupt one of the world's most integrated auto supply chains. U.S. auto production is heavily reliant on Canadian-made parts and vehicles, and higher tariffs could raise costs for American automakers and consumers
• Trump wants Canada to come to the table and negotiate in good faith, U.S. Treasury Secretary Scott Bessent told reporters on Monday
• Immediate resistance is located at 1.3888(50%fib), any close above will push the pair towards 1.3945(SMA 20.).
• Support is seen at 1.3731(38.25fib) and break below could take the pair towards 1.3700( Lower BB).
Recommendation: Good to sell around 1.3860 with stop loss of 1.3920 and target price of 1.3800
