Short-term volatility for the CAD is increasing as tensions regarding tariffs rise, with 1-week implied volatility reaching 8.95%. President Trump’s recent comments suggested the advancement of tariffs on Canada and Mexico, but specifics remain unclear.

The CAD remains steady amid mixed signals from the market. Trading around the 1.42 mark may continue, influenced by uncertainty over tariffs and a lack of decisive movement in the USD.

Resistance for the USD is noted at 1.4250/60, while support sits at 1.4150/75. Recent trading patterns suggest potential shifts could occur towards the 1.4335/40 area, depending on upcoming developments.

Short-term traders should be aware that price fluctuations in the Canadian dollar might not settle in the coming weeks. With implied volatility climbing toward 9%, the cost of options continues to reflect growing unease. Recent remarks from Donald have only added to this, as markets attempt to interpret whether fresh tariffs will be imposed or if negotiations will prevent escalation. Without concrete details, short-term movements may remain choppy.

The strength of the Canadian dollar has held firm despite these concerns. Current levels near 1.42 suggest that traders are still weighing the likelihood of actual trade restrictions against broader market conditions. If nothing major changes in tariff discussions, prices could drift within recent ranges. The absence of a firm stance from the US dollar also helps maintain this balance.

For those watching short-term price barriers, key areas remain well-defined. The US dollar is struggling to push through 1.4250/60, suggesting that sellers are active in this zone. On the downside, demand has supported prices around 1.4150/75. If external factors shift momentum, levels around 1.4335/40 become the next point of focus. This makes any updates on trade policy, or sudden shifts in risk appetite, worth monitoring.

Until more details emerge, price action may remain hesitant. However, as the market reacts to any new trade developments, traders should be prepared for potential swings outside of the current price band.