October 7, 2025
USDCAD open 1.3955, overnight range 1.3941-1.3963, close, 1.3942
USDCAD opened at the same level as yesterday after another uneventful overnight trading session. USDCAD direction remains at the mercy of broad US dollar sentiment but the risk of a more sever economic slowdown from Trump’s trade war with Canada suggests USDCAD has far more upside than downside.
Prime Minister Mark Carney meeting with Trump today is not expected to yield anything in the way of tariff relief.
WTI oil is consolidating yesterdays gains in a 61.28-62.04 range. Gains are limited due to ongoing concerns that the latest Opec production increases will exacerbate a near term oil glut. If so, the Friday close, Monday open gap between 60.69 and 61.14 will be filled.
Canada’s August trade deficit widened to$6.32 billion (forecast$5.55 billion) from $4.94 billion in July with exports to the US falling by 3.4%.
USDCAD Technical Outlook:
The intraday technicals unchanged from yesterday. They are bullish while trading above the 1.3890-1.3900 range and looking for a break above the 1.3970 are (4 hour chart) to extend gains to 1.4020. A move below 1.3930 targets 1.3890.
The medium-term technicals are bullish but need to see a decisive break above the 1.4000 area to set the stage for further gains to 1.4120. Failure to take out 1.40000 risks further 1.3700-1.4000 consolidation.
For today, USDCAD support is 1.3920 and 1.3840. Resistance is 1.3990 and 1.4020. Today’s Range: 1.3920-1.3990.
FX Markets Waiting for the Other Shoe to Drop
The major currencies are relatively calm against a backdrop of major political dysfunction in France and the USA, the ongoing war between Russia/Ukraine, and Israel/Hamas. The US government shutdown also closed the door to government economic reports.
Traders will pay more attention to remarks from Fed policymakers for insight into the pace and depth of rate cuts. To that end, remarks from Governors Michelle Bowman, Stephen Miran, and Atlanta Fed President Raphael Bostic may carry more weight than usual.
Just in case trades….
The political uncertainty and the lack of US economic data have given gold and cryptocurrencies a leg up. Gold (XAUUSD) hit another record high, reaching 3977.19 overnight, while Bitcoin (BTCUSD) reached $126,064.16. The prospect of additional Fed rate cuts and steady buying by central banks (China’s PBoC is a notable buyer of gold) is also underpinning prices.
Taking stock
Asian equity indices were indecisive. Japan’s Topix closed flat and Australia’s ASX 200 fell by 0.27%. Hong Kong’s Hang Seng Index lost 0.67%.
As of 5:43 a.m. PDT, European equities are in positive territory. The German DAX is up 0.21%, and the French CAC-40 has gained 0.29% and the UK FTSE 100 has risen by 0.27%. S&P 500 futures are flat. The U.S. Dollar Index (DXY) is 98.51 and the U.S. 10-year Treasury yield is 4.171%.
EURUSD
EURUSD traded negatively in a 1.1660-1.1717 range. The recovery from Monday’s European losses, which occurred after the fall of the French government, rallied prices to 1.1721 in NY, but the gains were due to profit-taking. If investors are worried about UK debt, they are terrified about French debt. The yield on French government bonds (OATs) is higher than that of Italian bonds, which, according to Bloomberg, has not occurred since the euro was founded in 1999. German factory orders fell 0.8% m/m in August. A move below 1.1640 will drive EURUSD to 1.1570.
GBPUSD
GBPUSD mirrored EURUSD moves and traded with a bearish bias in a 1.3430-1.3487 range. Rising French OAT yields are dragging UK gilts higher. Britain can take the UK out of the EU, but you can’t take the EU out of the UK. Halifax House Price data was weaker than expected, falling 0.3% m/m in September compared to a gain of 0.3% in August. Nevertheless, GBPUSD remains range-bound in a 1.3300-1.3520 band.
USDJPY
USDJPY is consolidating yesterday’s gains in a 150.24-150.83 range. The election of Sanae Takaichi as leader of the LDP party and soon-to-be Japan’s Prime Minister has analysts rewriting forecasts. The government is expected to adopt a fiscal stimulus plan and push back against BoJ plans for tightening. USDJPY is vulnerable to a gap-filling drop to 147.46.
AUDUSD
AUDUSD dropped from 0.6625 to 0.6586 as it retraced yesterday’s gains and continues to chop in a 0.6520-0.6630 range, which has contained price action for two weeks. Australian consumer confidence fell 1.2 points to 85.1 last week, partly because the RBA left interest rates on hold.
USDMXN
USDMXN rose in a 18.3323-18.3886 range as it clawed back some of yesterday’s losses, with price action determined by general US dollar moves.
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 continue
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics
