USD/CAD drops below 1.29 as Trump's tariff plan may exclude Canada

• CAD mildly bid on reports Trump's tariff plan may exclude Canada. 
• USD/CAD dipped below 1.29. 
• Risk reversals remain near yearly highs. 

The Canadian dollar is on the rise in Asia, pushing the USD/CAD below 1.29 on reports Trump's tariff plan may exclude Canada. 

As of writing, the pair is losing 0.32 percent at 1.2869.  Washington Post reported earlier today that Trump may not announce tariffs on Canadian imports, and the exemption could be extended depending on NAFTA (North American Free Trade Agreement) negotiations. 

The CAD found bids after the news hit the wires, although one-month risk reversals continue to show strong demand for CAD puts (bearish bets). As of writing, the risk reversals gauge stands just below the 10-month high of 0.30 seen on March. 5. (positive number indicates strong demand for CAD puts). So, CAD gains could be transient. 

Also, the pair may reverse course later today if the Bank of Canada (BOC) governor Poloz expresses concerns about lower wage and household credit growth and risks from protectionist policies. 

USD/CAD Technical Levels

A break below 1.2862 (Mar. 6 low) would open up downside towards 1.2825 (10-day MA) and 1.28 (psychological level). On the other hand, a move above 1.2923 (session high) could yield a re-test of 1.2960 (resistance on 1-hour chart) and 1.30 (previous day's high).