USD/CAD Price Forecast: Bearish indicators keep the path tilted lower

The USD/CAD exchange rate has been trending downwards on Tuesday, with the Canadian Dollar (CAD) benefitting from a weaker US Dollar (USD) amid ongoing US-Canada tariff disputes. Currently, the pair is trading near 1.3834 after falling from an intraday high of 1.3867. Canada recently imposed retaliatory tariffs on $27.6 billion worth of US goods, which will take effect from September 8.

The US had retaliated by imposing 50% tariffs on $27.6 billion worth of Canadian imports after trade talks between the two countries broke down.

The near-term outlook favors the CAD, as the US Dollar struggles to attract buyers due to renewed concerns of US dollar debasement. Technical analysis indicates a bearish bias, with USD/CAD trading below several key resistance levels, including the 200-day Simple Moving Average (SMA) at 1.3843, the 50.0% Fibonacci retracement at 1.3887, and the 100-day SMA at 1.3914.

The Relative Strength Index (RSI) is near 37, and the Moving Average Convergence Divergence (MACD) is negative, suggesting that any recovery attempts may attract sellers. The Average Directional Index (ADX) at 35 indicates a strong underlying trend, further supporting the bearish outlook.

Potential support levels include the 61.8% Fibonacci retracement at 1.3803, the 78.6% retracement at 1.3684, and the 100.0% retracement at 1.3531. A break below the 61.8% retracement could expose the 78.6% retracement, while a close above the 200-day SMA and the 50.0% retracement could signal a potential recovery towards the mid-1.39 range.