Trade friction and Federal Reserve suspense pushed the dollar up against the Canadian dollar

This Friday's Asian trading session, the US dollar rebounded against the Canadian dollar from recent lows, and the exchange rate rallied to around 1.3520, mainly driven by the improvement of short-term market sentiment, and the US dollar strengthened against the Canadian dollar.

according toDBG ForexMarket Watch, investors are currently focusing on two changes: one is the latest developments in the personnel arrangement of the Federal Reserve chairperson, and the other is the re-tightening of trade relations between the United States and Canada. Uncertainty over trade policy has a direct impact on the Canadian dollar.

The US has raised concerns about the prospects for bilateral trade by saying it could impose steep tariffs on Canadian aircraft over the certification process.

Under the influence of risk aversion, the Canadian dollar is facing some pressure as a commodity currency, while the US dollar is relatively supported, which has promoted the short-term rise of the US dollar against the Canadian dollar.

At the same time, the market is highly concerned about the announcement of the choice of the Federal Reserve chairperson. It was reported that Kevin Warsh, a former Fed governor, was a popular candidate after the meeting, and investors were assessing the impact of the appointment on the Fed's policy independence.

On the fiscal front, news shows that the White House and the Senate have reached a preliminary agreement on government financing, avoiding the risk of a shutdown in the short term, which is positive for the dollar. But the bill still needs to be advanced in the House of Representatives, and the uncertainty has not been completely eliminated.

Therefore, the current strength of the dollar is more a sentiment repair than a trend reversal.

From a technical point of view, the US dollar rebounded technically after gaining support in the 1.3450 to 1.3480 area. This area is the lower edge of the previous shock range, and there are multiple short-term moving averages intertwined, which has certain technical significance.

Although prices have rebounded, they are still in a weak pattern of medium-term shocks. The short-term moving average began to flatten, and the medium-term moving average still maintained a downward trend, indicating that the bulls have not yet regained dominance.

After rebounding to around 1.3520, the exchange rate approached the pressure zone of the 5-day and 10-day moving averages, and the short-term faced a direction choice.

The RSI index rose from a low level to the neutral area, reflecting the release of bearish kinetic energy; the MACD green column continued to converge, indicating that the downside kinetic energy weakened, but the double line still runs below the zero axis, indicating that the rebound is more of a repair nature.

Overall, the dollar against the Canadian dollar may continue to rebound in the short term, but the lack of new dollar benefits may limit the rebound height.

In terms of key price points, the upper part focuses on the 1.3580 to 1.3600 pressure range; the lower support is located at the 1.3480 line. If it falls below, it will reopen the falling space.

editorial opinion

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The current rebound of the US dollar against the Canadian dollar is a sentiment repair against the backdrop of multiple uncertainties. The risk of trade friction has weighed on the Canadian dollar, while the suspense over the selection of the Federal Reserve chair and the risk of a government shutdown have been suspended, providing short-term support for the dollar.

However, from a longer-term perspective, the US dollar still faces multiple constraints such as policy independence, fiscal game, and interest rate cut expectations. The technical side shows that the exchange rate has not yet broken free from the shock range, and the choice of direction is highly dependent on the progress of subsequent events.