Before the European market on Tuesday (February 18th), the US dollar/Canadian dollar exchange rate traded around 1.4185, supported by the rebound of the US dollar, putting pressure on the Canadian dollar, especially against the backdrop of global economic uncertainty and a lack of strong support from domestic economic data in Canada.

Tonight, Canada will release its Consumer Price Index (CPI) data for January, which is undoubtedly the focus of market attention. According to market expectations, Canada's CPI annual growth rate is expected to be 1.8%, slightly higher than December's 1.6%. The monthly data is expected to increase by 0.1%, which is different from the 0.4% decline in December last year.

As the release of CPI data approaches, the market's reaction to it will have a significant impact on the short-term trend of the US dollar/Canadian dollar. If the CPI data is higher than expected, the Canadian dollar may receive a certain boost; On the contrary, if the data falls short of expectations, the downside risk of the Canadian dollar will increase, further supporting the rise of the exchange rate.

Technical analyst interpretation:

From a technical perspective, the US dollar/Canadian dollar still shows some downward pressure in the short term. According to the 4-hour chart, the current exchange rate is still below the 100 cycle exponential moving average (EMA), which is a technical signal indicating that the bearish trend of the US dollar/Canadian dollar is temporarily dominant. The 100 cycle EMA is located around 1.4350, which is an important resistance level for the exchange rate, and the current price has not yet broken through this critical technical level.

Further analysis shows that the Relative Strength Index (RSI) displays a certain level of selling pressure. RSI is around 40, below the median of 50, indicating that the market is in a mildly oversold state, and bearish forces still dominate in the short term. This RSI trend strengthens the seller's control, indicating that the short-term downward trend of USD/CAD may continue.

In terms of support, the initial support for the current exchange rate is at 1.4150, which is the low point on February 14th. If the US dollar/Canadian dollar breaks through this support level, it may accelerate its downward trend, testing the next support level of 1.4130, which is where the lower Bollinger Band is located. If the support falls, the psychological threshold of 1.4100 will become the next important support level.

From the perspective of rebound, the first upward resistance level of the exchange rate appears at 1.4265, which is the upper limit of the Bollinger Bands. If the price breaks through this resistance, it may push the exchange rate further up, with the target locked at 1.4350, the resistance level at the 100 cycle EMA. If the price continues to rise, it may challenge the February 10th high of 1.4380, which will become the next major upward target.

Overall, the technical trend indicates that the US dollar/Canadian dollar may continue to face some downward pressure in the short term, but there is still potential for an upward rebound. The release of CPI data will become an important triggering factor in the market, which may affect prices to break through the current technical level. Pay attention to the support ranges of 1.4150, 1.4130, and 1.4100, as well as the resistance areas of 1.4265, 1.4350, and 1.4380.

Summary:

Currently, the rebound of the US dollar supports the trend of the US dollar/Canadian dollar, and the release of Canada's January CPI data may have a significant impact on the exchange rate trend. Technically, there is some downward pressure, but if the key support or resistance range is broken in the short term, there may be significant fluctuations.