On Friday (February 28th), before the European market opened, the US dollar/Canadian dollar (USD/CAD) continued its upward trend of breaking through the 50 day simple moving average (SMA) on the previous trading day, gaining positive momentum and completing a six day consecutive rise. The exchange rate successfully broke through the range of 1.4450-14.455 during the Asian session, setting a new high in nearly four weeks. The main driving factors for this rise are the continued strength of the US dollar and the support of US economic data.

The revised GDP data for the second quarter of the United States shows that inflationary pressures continue to increase, further consolidating market expectations that the Federal Reserve will maintain a hawkish policy and pushing up the US dollar index (DXY). The strength of the US dollar provided strong support for the US dollar/Canadian dollar and pushed the exchange rate to break through key technical resistance ranges. At the same time, Canada's economic situation is also facing certain pressure. Trump's confirmed tariff policy, which will take effect on March 4th, coupled with the decline in international crude oil prices, has further weakened the Canadian dollar linked to commodities, becoming another key factor driving the rise of the US dollar/Canadian dollar.

However, the market maintains a certain level of caution as it waits for the upcoming release of the US Personal Consumption Expenditures (PCE) price index. The release of PCE data will have a significant impact on the direction of the Federal Reserve's monetary policy and may serve as a catalyst for short-term fluctuations in the US dollar/Canadian dollar. Therefore, market sentiment remains complex and the short-term trend is full of variables.

If PCE data indicates further inflationary pressures, the likelihood of the Federal Reserve maintaining interest rate hikes will increase, further supporting the strength of the US dollar. On the contrary, if PCE data is lower than expected, it may lead to a correction in the US dollar, which in turn may affect the trend of the US dollar/Canadian dollar.

Technical analyst interpretation:

On a technical level, the upward momentum of the US dollar/Canadian dollar continues to be strong, breaking through multiple key technical levels, especially the 50 day simple moving average (SMA) position (1.4346). At present, the exchange rate is approaching the resistance range of 1.4450-1.4455, and there is a high possibility of breaking through this area. If it successfully breaks through, it is expected to challenge higher levels of 1.4470-1.4500 in the future.

Firstly, from the arrangement of moving averages, the 14 day, 9 day, and 50 day moving averages show a clear upward trend, indicating that the market is currently in a bullish dominated market. Especially at the position of 1.4346 on the 50th, SMA has become the support level for the current price, and with the rise of the exchange rate, the support level has a gradually upward trend.

The MACD indicator shows that the current DIFF value is positive, and the MACD bar chart shows strong momentum. The upward divergence of MACD and signal lines indicates that bullish forces still dominate in the short term, further confirming the upward momentum of the US dollar/Canadian dollar.

Technically, the current price has broken through the resistance range of 1.4450-1.4455 and there is a possibility of further increase. If the future price continues to remain above this range, the next target range may point to the 1.4470-1.4500 area. The current support levels are 1.4260 and 1.4150, respectively. If the price falls back to these support levels, it may attract some bargain hunting buying.

Conclusion and Prospect

The USD/CAD is currently maintaining a strong upward trend, and may continue to challenge higher price levels in the short term, especially after breaking through the range of 1.4450-1.4500, the upward space in the future will be further opened up. However, as RSI approaches the overbought zone, attention should be paid to whether there will be a pullback in the short term; In addition, the market remains cautious before the release of important economic data.