Recently, the Canadian dollar has experienced a significant rebound, mainly influenced by the agreement reached between Canada and the United States to avoid trade tariffs. Due to this agreement, the Canadian dollar has successfully rebounded from its lowest point in many years, and market sentiment has rebounded accordingly.

The trade relationship between Canada and the United States has recently seen a turning point. The United States and Canada had originally planned to impose tariffs on each other on Tuesday (February 4th), but this plan was suspended after reaching an agreement. According to the agreement, Canada has agreed to strengthen its border security measures with the United States to meet the demands of the Trump administration. The achievement of this agreement has brought comfort to the market, especially after Canada and Mexico reached agreements with the United States earlier, which restored confidence in the Canadian dollar and pushed the Canadian dollar exchange rate stronger.

When announcing the agreement, Trump said, "I am very satisfied with this preliminary result. The tariffs announced on Saturday will be suspended for 30 days to see if a final economic agreement can be reached with Canada." The market is positive about the situation, believing that trade tensions between Canada and the United States are expected to ease, providing support for the Canadian dollar.

Affected by this news, the US dollar/Canadian dollar exchange rate climbed to 1.48 on Monday, but then fell by 2.50%, closing around 1.4429. The rebound of the Canadian dollar shows market optimism towards the agreement, especially as the trade dispute eases and the Canadian dollar gradually recovers some of its lost ground against the US dollar.

Driven by multiple factors, the Canadian dollar has successfully rebounded from its low point in many years. The trend of the US dollar is affected by the uncertainty of the Federal Reserve's policies, resulting in a slight weakness in its competition with the Canadian dollar.

Technical analyst interpretation:

In the short term, the price levels of 1.45 and 1.44 will be key technical support areas. If the price falls below these support levels, the US dollar/Canadian dollar may further decline.

From a longer-term technical perspective, the USD/CAD is still facing strong resistance at the 1.50 level. If the price rises again and breaks through the resistance zone of 1.48 and 1.50, it may further rise, approaching 1.52 or even 1.55. However, in the short term, due to the impact of the agreement between Canada and the United States, market confidence in the Canadian dollar has rebounded, and the US dollar/Canadian dollar exchange rate may find it difficult to break through these resistance levels.

For the USD/CAD, the short-term support level will be in the 1.44 and 1.45 regions. If the exchange rate falls below these support levels, it may further decline to 1.42 or lower. In terms of resistance, 1.48 and 1.50 are currently the main technical resistance levels, and breaking through these areas may open up a larger upward trend. In the medium term, if the exchange rate can effectively break through these technical resistance zones, the US dollar/Canadian dollar may potentially return to levels above 1.52.

summary

From a fundamental perspective, the trade agreement between Canada and the United States has had a positive impact on the Canadian dollar, successfully rebounding from a multi-year low and driving its exchange rate back up. However, the US dollar/Canadian dollar still faces some technical resistance, and the market is paying attention to the trend of the US dollar and the monetary policy of the Federal Reserve.

From a technical perspective, the US dollar/Canadian dollar is in a critical technical support and resistance zone, and its future trend will depend on whether it can break through these technical levels. In the short term, the Canadian dollar may continue to remain in a strong range, and if the market further confirms the positive impact of the Canada US agreement, it may further push up the Canadian dollar.