Is it too late for a TACO trade on USD/CAD?

USD/CAD jumped nearly 900 pips on Monday after President Donald Trump announced he is “terminating” trade negotiations with Canada. But the surge didn’t stick. Within hours, the pair gave up most of its gains, slipping back below the 1.3700 breakout level.

There’s been no reversal from Trump — not yet. But price action suggests the market might be front-running one. Traders have seen this before: the “TACO” setup — Trump Always Chickens Out.

In that context, traders may be cautious about chasing the spike without confirmation that the trade breakdown will be long-lasting. The USD/CAD trade now hinges on updates from Trump for more TACO setups.

If USD/CAD stays below 1.3700, the focus shifts back to 1.3628 and possibly lower. Below that, the long-term structure suggests a broader range between 1.3500 and 1.3770.