Trade policy uncertainty supports the US dollar, and the USD/CAD pair consolidates near resistance levels.
2026-02-24 14:27:39
On Tuesday during the Asian session, the USD/CAD pair exhibited a fluctuating upward trend, finding short-term buying support around 1.3715. The US dollar performed relatively strongly, but its upward momentum was constrained by both trade policy uncertainty and commodity market volatility.
US trade policy has become the focus of the market. US President Trump warned countries not to deviate from trade agreements reached with the US. Following the US Supreme Court's rejection of some emergency tariffs, Trump indicated he might impose a uniform 15% tariff on all imported goods globally.
Trade protectionist policies typically have two market effects: on the one hand, they may suppress global economic growth expectations; on the other hand, they may lead to short-term capital inflows into dollar-denominated assets as a safe haven. Middle East geopolitical risks continue to impact the energy market. There are reports that Trump is considering limited airstrikes against Iran.
If military conflict escalates, crude oil prices may rise. Since Canada is a major energy exporter, rising oil prices typically benefit the Canadian economy and the Canadian dollar; therefore, a high oil price environment may limit further upside potential for USD/CAD.
Regarding monetary policy, the market will focus on the Bank of Canada's interest rate path. A slowdown in Canadian economic growth could increase expectations of interest rate cuts, thereby weakening support for the Canadian dollar. Overall, USD/CAD is currently in a phase of balancing macroeconomic policy uncertainty and its commodity currency characteristics.
From a daily chart perspective, USD/CAD remains in a generally bullish, range-bound pattern. The exchange rate has gradually risen since rebounding from its previous lows and is currently trading above the short-term moving average system, but the upward slope is relatively gentle, indicating that the bulls are proceeding cautiously.
Regarding the moving average system, short-term moving averages have begun to turn upwards, but medium- and long-term moving averages have not yet formed a clear bullish alignment. The 50-day exponential moving average is gradually becoming a short-term trend reference line, with prices fluctuating repeatedly around this area, indicating that the market is still searching for a new trend direction.
In terms of momentum indicators: The RSI indicator is running in the neutral to high range. The MACD momentum bars are expanding slightly but have not formed a trend breakout, indicating that the upward momentum still exists, but it does not have the conditions for unilateral acceleration. In terms of candlestick structure, small-bodied candlestick combinations have appeared many times recently, reflecting that the forces of bulls and bears are relatively balanced.
The market is more inclined to consolidate within a high range rather than break out of a trend. Resistance is at 1.3750, with short-term resistance at 1.3800. Support is at 1.3650, with short-term support at 1.3550. If the price breaks through 1.3750, the short-term bullish trend may continue; if it falls below 1.3650, it may enter a deeper correction phase.
Editor's Note:
The current USD/CAD exchange rate movement is essentially a result of the interplay between macroeconomic policies and commodity cycles. The US dollar is supported by trade policy uncertainty, while the Canadian dollar is highly dependent on crude oil price movements.
The future direction of the exchange rate will mainly depend on three factors: first, the final implementation of US tariff policies; second, whether geopolitical conflicts in the Middle East will escalate; and third, the performance of Canadian economic growth data. Overall, the exchange rate is more likely to remain range-bound in the short term rather than form a one-sided trend.
US trade policy has become the focus of the market. US President Trump warned countries not to deviate from trade agreements reached with the US. Following the US Supreme Court's rejection of some emergency tariffs, Trump indicated he might impose a uniform 15% tariff on all imported goods globally.
Trade protectionist policies typically have two market effects: on the one hand, they may suppress global economic growth expectations; on the other hand, they may lead to short-term capital inflows into dollar-denominated assets as a safe haven. Middle East geopolitical risks continue to impact the energy market. There are reports that Trump is considering limited airstrikes against Iran.
If military conflict escalates, crude oil prices may rise. Since Canada is a major energy exporter, rising oil prices typically benefit the Canadian economy and the Canadian dollar; therefore, a high oil price environment may limit further upside potential for USD/CAD.
Regarding monetary policy, the market will focus on the Bank of Canada's interest rate path. A slowdown in Canadian economic growth could increase expectations of interest rate cuts, thereby weakening support for the Canadian dollar. Overall, USD/CAD is currently in a phase of balancing macroeconomic policy uncertainty and its commodity currency characteristics.
From a daily chart perspective, USD/CAD remains in a generally bullish, range-bound pattern. The exchange rate has gradually risen since rebounding from its previous lows and is currently trading above the short-term moving average system, but the upward slope is relatively gentle, indicating that the bulls are proceeding cautiously.
Regarding the moving average system, short-term moving averages have begun to turn upwards, but medium- and long-term moving averages have not yet formed a clear bullish alignment. The 50-day exponential moving average is gradually becoming a short-term trend reference line, with prices fluctuating repeatedly around this area, indicating that the market is still searching for a new trend direction.
In terms of momentum indicators: The RSI indicator is running in the neutral to high range. The MACD momentum bars are expanding slightly but have not formed a trend breakout, indicating that the upward momentum still exists, but it does not have the conditions for unilateral acceleration. In terms of candlestick structure, small-bodied candlestick combinations have appeared many times recently, reflecting that the forces of bulls and bears are relatively balanced.
The market is more inclined to consolidate within a high range rather than break out of a trend. Resistance is at 1.3750, with short-term resistance at 1.3800. Support is at 1.3650, with short-term support at 1.3550. If the price breaks through 1.3750, the short-term bullish trend may continue; if it falls below 1.3650, it may enter a deeper correction phase.
Editor's Note:
The current USD/CAD exchange rate movement is essentially a result of the interplay between macroeconomic policies and commodity cycles. The US dollar is supported by trade policy uncertainty, while the Canadian dollar is highly dependent on crude oil price movements.
The future direction of the exchange rate will mainly depend on three factors: first, the final implementation of US tariff policies; second, whether geopolitical conflicts in the Middle East will escalate; and third, the performance of Canadian economic growth data. Overall, the exchange rate is more likely to remain range-bound in the short term rather than form a one-sided trend.
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