[DAILY TRADING] USD/CAD Analysis 5 August 2026: Tariffs and Falling Oil Test a Fed and BoC on Hold

As of 07:45 (GMT+8) on 5 August 2026, the Vantage USDCAD CFD sits at 1.40691, barely moved from its 1.40672 open. That calm is deceptive: over the past day, USD/CAD swung from 1.4035 to 1.4080 and back, a round trip that says tug-of-war, not trend. A divided Fed, a paused Bank of Canada, a looming tariff deadline, and fading oil are all leaning on this pair, and none of them is winning yet.

What the Chart is Showing

USD/CAD opened at 1.40672 and has ranged between 1.40708 and 1.40656, a narrow session inside a wider story than the one we mapped in our last USD/CAD update. On 4 August, the pair dipped near 1.4035, then reversed hard as the session progressed to print a high near 1.4080. Since then, most candles have closed either side of 1.4065 to 1.4075.

The 50-period moving average, at 1.40690, is sitting almost exactly on top of current price, which is why the pair is leaning on it as a same-day pivot rather than a clear trend guide. The 200-period moving average, at 1.40540, is the slower-moving line, running well beneath the market and only briefly dipped under during the 4 August low.

RSI backs up that indecision. On the TradingView setup used for this analysis, the 14-period RSI spiked above 70 in the early hours of 4 August, fell to the low 30s by mid-morning, and rallied back above 70 around midday. It eased through the rest of the session and into 5 August, touching the mid-60s twice more overnight, before settling at 45.95, below its 54.21 average, at the cut-off.

The Fed and the Bank of Canada: Two Central Banks, One Long Pause

The dollar side has been shaped by a Federal Reserve that is anything but unanimous. The FOMC voted 9-3 on 29 July to hold rates at 3.50% to 3.75%, a fifth straight hold, with three presidents dissenting for a hike.¹ The next decision lands 15 to 16 September; Chair Kevin Warsh is expected to speak at Jackson Hole before then.⁸

Canada is in a similar spot. The Bank of Canada held its policy rate at 2.25% on 15 July, citing US trade uncertainty, the Middle East conflict, and a soft labour market.² Its next decision is 2 September. With both sides of USD and CAD on hold, the pair’s next move is more likely to come from a headline than a rate gap.

Tariffs and Oil are Really Driving This One

Trade policy is the sharper edge. Washington has confirmed a 50% tariff on a wide range of Canadian goods, from dairy and alcohol to a long list of manufactured products, effective 19 August.³ Canada’s trade minister was back in Washington this week for more talks before that deadline.⁴ Speculators built one of the largest net short positions against the Canadian dollar of any major currency in the weeks leading up to that announcement, a sign of how one-sided this trade story has become.⁵

Oil, the loonie’s other half, is not helping either. Brent crude fell sharply on 4 August on hopes for renewed US-Iran diplomacy over the Strait of Hormuz, plus a further OPEC+ output increase.⁶ A softer oil price strips away one of CAD’s usual supports, part of why USD/CAD has struggled to break lower even with tariff headlines that would otherwise weigh on the dollar. Read as USD/CAD or a cad to usd forecast, the drivers are the same.

Also on the calendar: US July jobs data lands 7 August, following a soft 57,000 print for June.⁷

Levels to Watch and Risk Considerations

For usd to cad levels heading into the next session, here is what stands out.

• Resistance: near 1.4080, the session high printed on 4 August.
• Pivot: 1.40690, the 50-period moving average, which price is trading right on top of.
• Support: 1.40540, the 200-period moving average, the slower base running beneath the recent range.
• Support: near 1.4035, the session low printed on 4 August.

Levels sourced from the TradingView setup used for this analysis. Accessed on 5 August 2026. Data indicative, for informational purposes only.

USD/CAD is a leveraged CFD product, and leverage cuts both ways. Sizing a position against account equity, not any single level, shapes the outcome here.

That’s the shape of this usd/cad forecast for now: two patient central banks, a falling oil price, and a tariff clock still ticking.

A day spent bouncing between 1.4035 and 1.4080 is a reminder that a Stop Loss set too tightly against ordinary noise can get clipped before a real change in direction shows up. Traders following USD/CAD into the tariff deadline and the Fed’s September meeting may want to size exposure with that wider range in mind.

Leverage remains a double-edged tool, not a shortcut: it can scale a modest account into meaningful exposure, but it scales losses the same way. Weighing position size against account equity, not a hoped-for figure, is the steadier way to approach a pair pinned between two patient central banks and a tariff clock still running.

For more USDCAD news and forecasts as the tariff deadline and the September central bank meetings approach, see Vantage’s dedicated coverage.

RISK WARNING: CFDs are complex financial instruments and carry a high risk of losing money rapidly due to leverage. You should ensure you fully understand the risks involved and carefully consider whether you can afford to take the high risk of losing your money before trading.

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References

[1] “Federal Reserve issues FOMC statement, July 29, 2026 – Federal Reserve” https://www.federalreserve.gov/newsevents/pressreleases/monetary20260729a.htm Accessed on 5 August 2026.

[2] “Bank of Canada maintains the policy rate at 2¼% – Bank of Canada” https://www.bankofcanada.ca/2026/07/fad-press-release-2026-07-15/ Accessed on 5 August 2026.

[3] “U.S. Imposes 50% Tariff on Select Canadian Products – TD Economics” https://economics.td.com/ca-tariffs-2026 Accessed on 5 August 2026.

[4] “Canada-U.S. trade minister back in Washington as countries ‘intensify’ trade talks – CBC News” https://www.cbc.ca/news/politics/leblanc-august-meetings-tariffs-9.7295896 Accessed on 5 August 2026.

[5] “Ahead of new tariffs, Canadian dollar overtook yen as most heavily shorted currency – BNN Bloomberg” https://www.bnnbloomberg.ca/markets/currencies/2026/07/23/ahead-of-new-tariffs-canadian-dollar-overtook-yen-as-most-heavily-shorted-currency/ Accessed on 5 August 2026.

[6] “Brent Crude Oil Futures Price Today – Investing.com” https://www.investing.com/commodities/brent-oil Accessed on 5 August 2026.

[7] “Employment Situation News Release – U.S. Bureau of Labor Statistics” https://www.bls.gov/news.release/empsit.nr0.htm Accessed on 5 August 2026.

[8] “July FOMC: Fed Holds Interest Rates Steady – Fox Business” https://www.foxbusiness.com/economy/federal-reserve-interest-rate-decision-july-29-2026 Accessed on 5 August 2026.