On Tuesday (November 26) during the European trading session, it was reported that Trump has increased his threat to impose high tariffs on major trading partners. He warned that one of his first executive orders would be to impose a 25% tariff on goods entering the United States from Canada or Mexico, while imposing a 10% tariff on Chinese exports.

The surge of the US dollar in news headlines reflects its potential to increase the risk of other currencies depreciating to offset tariffs. This also raises serious questions about the claim that Scott Bessent, the Treasury Secretary nominated by Trump, will be able to provide market friendly policy outcomes (including tariffs) as a rational voice.

The currencies of small open economies with large trading sectors have been hit the hardest, with the Canadian and New Zealand dollars hitting new lows in 2024. The Australian dollar/US dollar is not far away either.

USD/CAD hits four-year high

USD/CAD daily chart

The US dollar/Canadian dollar easily rose above 1.4105 to a level not seen since the early days of the COVID-19 epidemic. Previously used as resistance, it may now be seen transforming into a support level, allowing for the establishment of potential long positions above and tight stop loss protection below.

Before reaching the pre pandemic high of 1.4668, there were two smaller resistance levels, 1.4260 and 1.4340, in the middle. The possibility of long trading has increased, and MACD and RSI (14) have generated new bullish signals. However, RSI is located in the overbought area, reminding people to ensure that risk management is prioritized.

AUD/USD hovering above 2024 low

AUD/USD daily chart

Although Trump did not specifically mention Australia, the AUD/USD exchange rate was also hit. After falling below the small support level of 0.6480, the Australian dollar/US dollar has wobbled above its low of 0.6441 so far this year.

Although the relative strength index (14) and MACD indicator may soon flip, the momentum of the Australian dollar is not completely bearish. Pay attention to 0.6441- if the exchange rate remains at this level, consider buying early and setting a very tight stop loss below it to protect. Before continuing, it is best to see the interaction between price and levels.

On the contrary, if it falls below 0.6441, a short position can be established below and a very tight stop loss can be set above for risk management. 0.6380- the key support level for the upward trend - will be the initial trading target.

NZD/USD rebounds and sells

Daily chart of NZD/USD

The New Zealand dollar/US dollar is another currency pair that has been hit, briefly hitting a 2024 low before rebounding below 0.5800. The New Zealand dollar is trapped in a downtrend, with momentum entirely related to bears, ensuring that the market still tends to rebound and sell until there are clear sell signals. Short positions can be established when approaching a downward trend and set stop losses above for protection. Beyond the low point set earlier today, 0.5774 is a potential target.

Although we may see a position adjustment in the New Zealand dollar before the Reserve Bank of New Zealand's interest rate decision on Wednesday, the recent decision on the trend of the New Zealand dollar/US dollar is the outlook for US interest rates.