Tariffs and doubts – North American Mid-Week Market update

• Mid-Week review where we dive into the major developments for North American and global traders
• A mixed week in North American trading as recent Supreme Court decision to ban IEEPA tariffs has brought the topic back
• Traders are still assessing the impact of the Trump Admin's new policies, with Markets ranging

Log in to our mid-week North American Markets overview, where we examine current themes in North America and provide an overview of index and currency performance.

New anxiety is showing up in Markets after the latest round of Trump Administration economic and political drama.

The Supreme Court ruled that Trump's Liberation Day tariffs are illegal in last Friday's long-awaited decision.

More than $133 billion of duties may have to be refunded from the decision, leading to its own puzzle. The greatest confusion stems from participants' fear of the repercussions.

The President quickly announced that he would impose new tariffs under the temporary Section 122 law, allowing levies of 10% (brought up to 15%) for Balance of Trade purposes. The policy will only be active for 150 days; hence, it may trigger further action from Trump's legal team to find new ways to enforce it.

The irony of the new rule is that tariffs on Brazil, India, and, more particularly, China were significantly reduced (from close to 50% to 15% for the latter).

US Trade Representative Greer came out this morning saying that China would still see its original tariff level remain in place, but would have to face stricter legal rules to do so.

Markets initially reacted positively to the announcement, but the tone has since clouded. Participants are casting doubt on renewed trade uncertainty, as nations around the world have resurfaced their angst over the developments.

The Middle East remains a fear factor for traders right ahead of tomorrow's expected US-Iran third round of talks on the Nuclear and Ballistic Missile program from the Islamic Regime. If no deal is reached, wartime could be very near.

In terms of data, renewed acceleration in US data further delays hopes for Federal Reserve cuts, with last Friday's PCE reminding that the battle is not over (3.0% vs 2.8% expected) and the American labor market remaining pretty solid.

A wave of Fed speakers has made remarks on the issue, and a cut in May is now much less probable.

Let's dive right into our Mid-Week North American Markets recap.

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After a very choppy week, US Equities have began to form their rebound, particularly in Nasdaq and S&P 500. Both higher-beta indexes have found relief in the ironically easier tariffs rulings and been forming decent bottoms since.

Dow Jones is struggling on the other hand.

Still, they pale in performance compared to the Canadian TSX, up 2.50% this week, and especially the Japanese Nikkei 225, up close to 4.00% (apart from those gains being offset by the significantly weaker yen).

The US Dollar has remained very solid despite the renewed tariff uncertainty, with the DXY forming a rising wedge and testing its 98.00 Resistance now for the third time.

The Middle East risk-premium is also contributing to its relative demand, but overall, traders have faded the downmove in the Greenback. Combined with the heavy bearish positioning, it wouldn't be surprising to see the USD extend higher in times to come.

Levels to place on your DXY charts:

Resistance Levels

• 98.00 Key Mid-Range Resistance (testing)
• Mini-resistance 98.80 to 99.00
• 99.40 to 99.50 January Resistance
• 100.376 November highs

Support Levels

• 4H MA 200 97.70
• Mid-range Pivot 97.40 to 97.60
• 2025 Lows Major support 96.50 to 97.00
• Early 2022 Consolidation just below 96.00
• Trump USD Flash Crash 95.55
• 95.00 Main psychologic support

The US Dollar did remain surprisingly strong throughout the latest tariff drama, however as you can see, FX movement remained very muted. Expect more movement ahead.

Only the Chinese Yuan and Australian Dollar have outperformed the USD.

The Canadian Dollar held well throughout the last week but after a streak of softer CPI and Retail Sales, has started to see some outflows.

The big test lands on Friday with Canadian GDP to see how activity reflected throughout the final quarter of 2025. CAD traders will have to log in at 8:30 A.M that day!

USD/CAD has rebounded well since last week but is now facing a key test, holding within its key 1.3650 to 1.37 Pivot area, right between its 4H 50 and 200 period Moving Averages.

Moving above its 200 MA points to further upside and vice versa if it breaks the MA 50.

Check out our latest USD/CAD in depth analysis right here!

Levels of interest for USD/CAD:

Resistance Levels

• 1.37067 4H 200-MA
• 1.3770 to 1.38 Key Resistance (Channel top)
• Major Resistance 1.3870 to 1.39 (January highs)

Support Levels

• 2025 Key support Zone 1.3560 to 1.36
• October 2024 Support 1.3450 to 1.35
• 1.3480 USD-Crash lows

Friday should be the heaviest session in terms of Economic Data, between US PPI data and Canadian GDP.

And as always, keep a close eye on Middle East Developments.

Safe Trades!

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