- Canada will cancel the tax on digital services, increases sentiment Loonie after Trump’s criticism.
- USD/CAD trades around 1.3620, rejected from the resistance of Wedge and 21 -day EMA near 1,3700.
- RSI remains below 50 at 38.60, signals a weak bull momentum.
The Canadian dollar (CAD) receives on Monday on the basis of the US dollar (USD) after Canada announced that it would cancel its planned digital services tax with US technology companies. US President Trump stopped business interviews on Friday and called a “direct and obvious attack” on American technology companies. In response, Canada canceled the late Sunday tax to help get the negotiations back to the track. This step reassured the trade of tension and increased the demand for Loonie, weighed USD/CAD.
USD/CAD is currently traded near 1.3620 during the US meeting. The couple remains inside the falling wedge pattern and continues to slip into below after facing a strong rejection from the upper boundary of the descending wedge pattern last week near 1.3700-cherry area, which also corresponds to the 21-day exponential gliding average (EMA), which continues to act as dynamic resistance.
In order to develop meaningful recovery, the couple must definitely break above the region 1,3700. Daily near this resistance would invalidate the current bear view And it could attract a new interest in buying and moving a few towards 1.3800–1.3850.
The inability to break over the 21 -day EMA kept the seller under control and the price is now driving back towards the lower limit of the wedge. A permanent step below 1.3600 could reveal psychological support to 1.3500.
Mobility indicators Continue to lean bear. The relative force index (RSI) remains below 50 levels at 38.60, which indicates a weak bull momentum. Meanwhile, the histogram of the movable average convergence (MACD) began to reduce after a short recovery in mid -June, suggesting that the bull momentum weakens. While the MacD line remains above the signal line, the gap between them narrows and the bear crossover could be on the horizon if the sale of pressure persists.
As long as the couple drops out of the wedge, traders can expect a continued movement jerked within 1.3550–1.3700, with direction beliefs likely to be interested in a clear basic trigger or escape from the wedge pattern.
