Key Moments
- USD/CAD trades near 1.3675, down 0.16%, as the US Dollar weakens following President Trump’s State of the Union address.
- The pair is hovering just above its 20-day Exponential Moving Average around 1.3670, maintaining a mild bullish bias.
- Traders are watching upcoming US-Iran nuclear talks on Thursday, which could affect oil prices and the Canadian Dollar.
Market Overview
USD/CAD is trading lower around 1.3675 in early European hours on Wednesday, posting a decline of 0.16%. The pair is under pressure as the US Dollar (USD) weakens in the aftermath of United States (US) President Donald Trump’s State of the Union (SOTU) address before Congress earlier in the day.
At the time of writing, the US Dollar Index (DXY) – which measures the Greenback against a basket of six major currencies – trades 0.2% lower near 97.67, erasing all of its gains from Tuesday.
Political Backdrop and Policy Commentary
During his address, President Trump did not offer fresh guidance on the future path of US tariff policy. However, he criticized the Supreme Court for striking down his tariff measures. Trump highlighted what he described as the positive economic impact of his tariff approach and stated that they will substantially replace the system of income tax.
Canadian Dollar and Oil-Sensitive Flows
The Canadian Dollar (CAD) is trading broadly steady ahead of nuclear discussions between the US and Iran scheduled for Thursday. The outcome of these talks is expected to have a notable effect on oil prices. The CAD tends to react strongly to shifts in oil prices, as the Canadian economy is the largest exporter of oil to the US.
USD/CAD Technical Outlook
USD/CAD is currently trading near 1.3675 and remains slightly biased to the upside, as it stabilizes just above the 20-day Exponential Moving Average (EMA), located close to 1.3670. This positioning keeps price action aligned with the broader upward move that began in the mid-1.34 area.
If the pair manages to break above the January 27 high at 1.3740, it could open the way for a move toward the January 23 peak near 1.3800.
On the downside, initial support is seen at the 20-day EMA around 1.3671. A daily close below this level would expose the pair to potential further weakness toward the February 13 low in the vicinity of 1.3600.
The 14-day Relative Strength Index (RSI) is fluctuating within the 40.00-60.00 band, signaling subdued momentum.
| Technical Level | Value | Comment |
|---|---|---|
| Spot price (approx.) | 1.3675 | Trading lower on the day |
| 20-day EMA | 1.3670-1.3671 | Key initial support, maintaining mild bullish bias |
| Resistance – January 27 high | 1.3740 | Break above could target next resistance |
| Resistance – January 23 high | 1.3800 | Upside objective if 1.3740 is cleared |
| Support – February 13 low | 1.3600 | Downside target if price closes below 20-day EMA |
| 14-day RSI | 40.00-60.00 range | Indicates muted momentum |
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator: President Trump Speech
President Trump speech
Donald J. Trump is the 47th and current President of the United States. Before entering politics, he was a businessman and television personality. He became president for the first time in January 2017, representing the Republican party. His second mandate started in January 2025.
Read more.
| Release | Details |
|---|---|
| Last release | Wed Feb 25, 2026 02:00 |
| Frequency | Irregular |
| Actual | – |
| Consensus | – |
| Previous | – |
| Source | – |
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