Trump announced a 90 day suspension of tariffs on most economies, significantly reducing market risk aversion.

The strong rebound of the Nasdaq index and the return of market optimism have put pressure on the safe haven US dollar. Meanwhile, investors continue to expect the Federal Reserve to implement multiple interest rate cuts within 2025

Current market expectation: there may be a 75 basis point interest rate cut for the whole year; The latest FOMC meeting minutes indicate that officials are concerned about the inflationary pressure caused by Trump's tariffs, but tend to cautiously push for loose policies.

The US dollar bulls currently lack substantial support, and the market is waiting for the upcoming CPI data to be released as a basis for judgment, "market strategists pointed out.

WTI oil prices rose 4.65% on Wednesday, but fell back to $61.86 per barrel again on Thursday. As a commodity currency, the Canadian dollar's trend is highly correlated with oil prices. Although there has been a short-term rebound in oil prices recently, the expectation of OPEC+production increase and the unexpected growth of US crude oil inventories have suppressed its potential for sustained rebound

US EIA data shows that crude oil inventories increased by 2.6 million barrels last week, far exceeding market expectations of 1.4 million barrels; The Keystone oil pipeline leak incident did not significantly increase oil prices.

Therefore, despite the weakness of the US dollar, the Canadian dollar also lacks strong upward momentum, resulting in a volatile downward trend of the US dollar against the Canadian dollar.

From a technical chart perspective, the rebound of the US dollar against the Canadian dollar is limited by the 100 day moving average (around 1.4300), and after several unsuccessful attempts to rise, it shows a downward channel.

Short term support range 1.4060-1.4055, resistance range 1.4175-1.4180: short-term key resistance; 1.4200-1.4300:100 daily moving average area, breakthrough requires fundamental support.

If the price remains consistently below 1.4000, the technical bearish force will further strengthen

Investors are closely monitoring the upcoming release of US March CPI and PPI data to determine whether it is necessary for the Federal Reserve to initiate interest rate cuts in June. If the data shows signs of slowing inflation, the US dollar may come under further pressure, and the USD/CAD is expected to test the support zone of 1.4000 or even below; On the contrary, if inflation is stronger than expected, it may trigger a technical rebound in the US dollar.

Editor's viewpoint:

At present, the trend of the US dollar against the Canadian dollar is in a stage of long short power game. On the one hand, the US dollar is under pressure due to expectations of interest rate cuts and improved risk sentiment, while on the other hand, the uncertainty of oil prices limits the overall strength of the Canadian dollar.

In the short term, the 1.4000 mark has become a key technical and psychological support, and if it falls below it, it will open up further adjustment space. Pay attention to the direction selection under the combined effect of this week's US inflation data and oil price fluctuations.