As Canadian Prime Minister Mark Carney and President Donald Trump met for the first time since Carney’s election as prime minister, the bullish sentiment of about 28 billion Canadian dollars (20 billion US dollars) of derivatives market traders towards the Canadian dollar reached its highest level in 15 years.
The one-month risk reversal indicator for the Canadian dollar – a key gauge of trader sentiment based on the difference between call and put options – is in favor of the Canadian dollar, exceeding 8 basis points. This is the most bullish level for the Canadian dollar against the US dollar since the end of 2009.
During their meeting at the White House on Tuesday, Carney defended Canada’s sovereignty, while Trump insisted that he would determine the tariff levels for the United States’ trading partners. The Canadian dollar hit its highest level against the US dollar this year, reaching 1.3751 Canadian dollars, as the two leaders held talks in the Oval Office.
Win Thin, global market strategist at Brown Brothers Harriman in New York, said of the meeting, “The atmosphere was very amicable.” He added that the dollar’s break above 1.38 Canadian dollars – a level that had been a support for the dollar against the Canadian dollar over the past month – “should open the door for further gains in the Canadian dollar.”
At the beginning of this year, the market was far more pessimistic about the Canadian dollar, with investors betting that it would be hit hard by the new US administration’s imposition of tariffs on trading partners. However, the US dollar has continued to decline since January, while the Canadian dollar has soared by more than 4% so far in 2025 as traders have sold off US assets in large quantities due to concerns over US economic policies.
Some strategists point out that positive sentiment towards the Canadian dollar could squeeze the short positions in the currency held by hedge funds in the derivatives market.
Shaun Osborne, chief currency strategist at Bank of Nova Scotia, wrote in a note to clients on Tuesday that further strength in the Canadian dollar could make bearish investors “vulnerable to adjustment and liquidation.”
Daragh Maher, a strategist at HSBC in London, said: “It’s good that political uncertainty in Canada has decreased. But they still need to negotiate with the United States.”
Technical analysis:
Gold: Overnight news emerged that the United States and China will hold tariff negotiations in Switzerland, which is expected to lower the currently unreasonable high tariff levels. After touching 3440, the gold price has now retreated to the 3360-3380 range. For today, we suggest maintaining the pullback confirmation at the 3320-3340 range before attempting to capture new long signals. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: The overnight price was also lifted by the positive news that China and the US would negotiate the tariff issue, and it once again rose above the 20,000-point level, but failed to break through 20,200. It is unlikely that there will be a trend movement within the day. To continue testing higher levels, it may be necessary to seek liquidity. Pay attention to the rebound signal after sweeping the previous low. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Due to Trump’s 90-day suspension of full reciprocal tariffs, the pressure on oil prices from recession concerns has been greatly alleviated. Yesterday, the blue area in our article and plugin clearly indicated a momentum break signal. After the break at 58.18, a buy stop operation should be attempted. As a result, the price rose sharply to above 59.50. It is expected that the price will further rise and test within the day. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note “666” in the message.
Today’s key economic data and events to focus on:
17:00 Eurozone March retail sales (month-on-month)
02:00 US Federal Funds Rate Benchmark
At 2:30, Federal Reserve Chair Powell holds a monetary policy press conference.
