October 2, 2025

USDCAD open 1.3937, overnight range 1.3933-1.3950, close, 1.3936

USDCAD continues its slow grind higher as it attempts to chew through significant technical resistance in the 1.3950-60 zone, with additional resistance levels in the 1.3990-1.4010 area.

Traders are happily buying dollars (or keeping what they already own) due to the poor outlook for the Canadian economy. The BoC Summary of Deliberations showed policymakers were concerned about falling exports, declining business investment, and a significantly deteriorating labour market. They thought upward momentum in core-inflation had stalled which suggests more rate cuts are on the agenda

WTI oil prices traded with a bearish bias in a 61.24-62.50 range. Prices got a bit of support on reports that the US is considering supplying Ukraine with long-range missiles and intelligence to target distant Russian oil infrastructure.

There are no US or Canadian economic reports today.

USDCAD Technical Outlook:

The intraday technicals are neutral but with a bullish bias, looking for a decisive break above 1.3960 to extend gains to the 1.3990 (200day moving average) and 1.4010. The RSI’s remain elevated. A break below 1.3900 targets 1.3860.

The medium-term technicals show USDCAD stuck in a 1.3760-1.4000 band, A decisive break above 1.4000 suggests further gains to 1.4110 then 1.4270.

For today, USDCAD support is 1.3900 and 1.3860. Resistance is 1.3960 and 1.4000. Today’s Range: 1.39005-1.3990

Sidling to the Sidelines

The US government shut down surprised no one and that is evident in yesterday’s and overnight market action. Shutting down the government is no big deal for politicians because they continue to be paid.

Elon Musk got richer to the tune of half-a-trillion dollars as Tesla shares continue to rise. Traders are looking for two more consecutive Fed rate cuts following yesterday’s ugly ADP payrolls data. Payrolls fell by 32,000 in September (forecast 50,000) but even worse, the August numbers were revised to 3,000 job losses rather than 51,000 job gains.

Global equity markets rose the greenback is mixed, and gold continues to dance with its recent peak. Chinese markets are closed for Golden Week and that helps to dampen Asian trading activity. US weekly jobless claims and factory orders reports will not be released as scheduled because of the government shutdown.

Taking Stock

Asian equity indices closed higher, led by the 1.61% rally in the Hong Kong Hang Seng and the 1.13% gain in Australia’s ASX 200. Japan’s Topix lost 0.24% and mainland Chinese equity markets were closed for Golden Week holidays.

As of 5:30 am PDT, European equities are rising. The German DAX has gained 1.43%, the French CAC-40 index is up 1.43% and the UK FTSE 100 index is up 0.10%. S&P 500 futures are 0.27% higher. The US dollar index (DXY) is 97.62, gold (XAUUSD) is 3887.41 and the U.S. 10-year Treasury yield is 4.108%.

EURUSD

EURUSD drifted higher in a 1.1724-1.1759 range with prices supported by the increased odds for at least two more Fed rate cuts before year end. Markets ignored the uptick in Eurozone unemployment from 6.2% to 6.3% in August. Bloomberg reports that the EU is considering a 50% tariff on Chinese steel imports. Broad US dollar weakness reinforces EURUSD support in the 1.1670 area.

GBPUSD

GBPUSD continued its choppy grind higher, trading in a 1.3468-1.3510 range. Sterling may struggle to extend gains due to concerns ahead of the November 26 UK budget and risks that the Bank of England cuts interest rates before year end. GBPUSD technicals are bullish while prices are above 1.3330.

USDJPY

USDJPY traded lower in a 146.60-147.38 range and is sitting at 146.72 in early NY. The drop in Treasury yields, expectations for a BoJ rate hike, improved consumer confidence (actual 35.3 vs 35.2 in August) and uncertainty around the ruling LDP party leadership vote on October 4 are weighing on prices. USDJPY intraday technicals are bearish below 147.30.

AUDUSD

AUDUSD shuffled in a 0.6603-0.6625 range despite news that its trade surplus narrowed to $1.825 billion in August which was far below the forecast of $6.5 billion, and the $6.12 billion result in July. Broad US dollar weakness due to the American government shutdown is underpinning prices.

USDMXN

USDMXN traded in a 18.3400-18.4362 range overnight as it consolidated yesterday’s gains but prices remain just above the low, last seen in August 2024. Prices remain under pressure due to US politics and expectations that Banxico will be cautious in trimming interest rates.

USDCNY

PBoC fix: 7.1055 vs exp. 7.1166 (Prev. 7.1089)-CLOSED
Shanghai Shenzhen CSI 300 rose 0.45% to 4640.69-CLOSED

China’s golden week holidays last until October 8.

FX High, Low, Open              

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics