Released on Monday, the report from Statistics Canada revealed that, from January 2024 to December 2025, the number of active Canadian businesses dependent on the U.S. market fell by 2.9%, while other industries saw only a 0.7% decline. This gap widened further in 2025, indicating sustained pressure on sectors closely tied to the U.S. trade. The hardest-hit industries include mining, quarrying, oil and gas extraction, and manufacturing. Alan Arcand, Chief Economist at the Canadian Manufacturers & Exporters, noted that manufacturers are bearing the brunt of U.S. tariffs and trade uncertainty, with losses concentrated in Ontario, Quebec, and British Columbia. Simon Gaudreault, Chief Economist at the Canadian Federation of Independent Business, pointed out that since early 2024, Canada has been experiencing a "wave of business closures," with exits up 18.8% since Q4 2019, while new business entries have grown by just 5%. A survey by the federation found that 55% of members would not encourage their children to start a business, reflecting widespread exhaustion among small and medium-sized enterprise owners. 

From a 4H perspective, USD/CAD's Bollinger Bands are narrowing, moving averages are flattening, and price is oscillating between the Bollinger Upper and Lower Bands, with the short-term uptrend intact. The MACD and signal lines are above the zero line and have formed another golden cross, signaling that the upward trend remains unchanged. Resistance is near the EMA800 and round-number levels, at 1.377 and 1.38, respectively. RSI stands at 61, indicating that investors are predominantly buying. Based on the daily chart, the Bollinger Bands are also contracting, moving averages are flat, and the MACD has formed a golden cross, with both lines back above the zero line. Downward momentum has weakened, hinting at a bullish divergence and continuous rebound. After breaking through the Bollinger Middle Band and EMA50, the price is set to challenge the EMA200 again, around 1.38. RSI is at 59, reflecting optimistic market sentiment, with higher lows gradually forming. Therefore, it is better to buy the dips.

Trading direction: Buy

Entry Price: 1.375

Target Price: 1.4

Stop Loss: 1.36

Support: 1.35/1.325/1.28

Resistance: 1.38/1.4/1.42