The Canadian dollar was among the ones that stole the spotlight in trading on Tuesday as investors witnessed a sharp drop in value at the opening of the Asian session.
This was driven by reports of Donald Trump's threat of 25% tariffs on Canadian and Mexican imports.
This directly affected the Loonie with a significant decline to its lowest level in 4 years.
In addition, the global crude oil market also affected the Canadian currency when Israel was said to have agreed to ceasefire talks with Hezbollah.
On the USD/CAD currency pair chart, the price made an increase at the beginning of the week which was seen testing resistance at 1.4000 on Monday.
Investors assessed the initial signal for a bullish movement when the price hovered above the Moving Average 50 (MA50) support line on the 1-hour time frame on the chart.
In the Asian session on Tuesday morning, news of Trump's tariffs sent prices soaring by around 200 pips, surpassing the previous week's high of 1.41000.
The price reached a new high of around 1.41700, becoming the highest price record since 2020.
However, moving to the European and New York sessions, the price was seen to have started to retreat and decline again to around 1.40500.
Continuing trading in the Asian session today (Wednesday), the price rebounded slowly and was still seen moving above the MA50 while investors were cautious ahead of the key data to be published in the New York session.
If the price rise successfully continues to exceed 1.41000, the peak level of 1.41700 will be the target for the price to overcome for a new record high.
On the other hand, if the price drops lower below the MA50 support, the price is expected to approach the 1.4000 level and there will likely be a pullback reaction to watch.
A lower decline would expect the early week opening level around 1.39300 as the current support for price to retest.
