What is this USDCAD chart telling us about tariffs?
Looking at a USDCAD daily chart Shows there have been three spikes higher, each lower than the previous one (1.4795, 1.4542, 1.45.21).
USDCAD DAILY CHART
What each spike has in common is that it was the result of tariff related news. What each spike higher also has in common Is the sharp moves up failed to follow through.
What is the USDCAD chart saying about tariffs?
As I have noted many times, when in a perceived crisis, markets tend to price in the worst case and reassess later.
While news headlines are still sounding tariff alarms, charts are suggesting otherwise as traders reassess the situation.
In this regard, the daily USDCAD chart, aa described above, suggests
1) The worst case tariff outcome will be avoided.
2) The risk of escalation into a trade war is low
3) There is a chance that the hike in tariffs could be temporary or at least eventually mitigated by the negotiation of a new trade agreement.
This doesn’t mean that there will not be some fallout on the Canadian economy or that the situation will not spiral out of control. However, the chart suggests that the worst case will be avoided.
At a minimum, what started out as a one-way street, otherwise known as the Trump Effect Trade, has seen a two-way risk being restored. To indicate more a move below 1.4165 or firmly above 1.45 would need to suggest a more lasting reaction to tariffs.
USDCAD DAILY CHART UPDATEDÂ MARCH 26, 2025
                             (A touch lower but still within its range)
A look at a Mexican peso daily chart further supports what is seen on a USDCAD chart, which suggests a worst cae tariff outcome will be avoided. .
USDMXN DAILY CHART
Looking ahead, keep an eye on headlines, especially on the April2 reciprocal tariff announcement day. Not only the reaction but what charts show will give a clue what comes next.
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