USDCAD Technicals: Why isn't the Canadian dollar weakening vs the USD given the trade war?

AI summary

<p class="PDq2pG_selectionAnchorContainer">The trade war between the United States and Canada continues to escalate, but that has not translated into a higher USDCAD as most traders might expect.  .</p><p>Trade negotiations between the two countries broke down on August 21, leading the United States to impose 50% tariffs on about 5% of Canadian imports. Canada responded this week with tariffs of 15%, 25% or 50% on approximately $20 billion of U.S. goods.</p><p>President Trump has since increased the pressure by announcing restrictions on certain Canadian dairy products, motorcycles and most alcoholic beverages beginning September 29. He also directed the U.S. government to begin removing Canadian products from federal purchasing schedules unless Canada provides what he calls “full and fair reciprocity” for American businesses.</p><p>Canadian Prime Minister Mark Carney has defended Canada’s retaliation, saying the country cannot allow U.S. products to enter without tariffs while Canadian exporters face higher duties. Canada is also looking to reduce its economic dependence on the United States by increasing domestic production and expanding trade with other countries.</p><p>Fundamentally, the escalating trade dispute would normally be viewed as a negative for the Canadian economy—and potentially for the Canadian dollar. More than 70% of Canadian exports go to the United States, leaving Canada particularly vulnerable to higher tariffs and weaker cross-border trade.</p><p>Howeve