January 23, 2026
USDCAD open: 1.3783, overnight range 1.3759-1.3800, close 1.3786
USDCAD consolidated this week’s losses than renewed the slide in NY trading undermined by rising commodity prices, and broad US dollar weakness. There is a sell America narrative that is depressing the greenback because of Trump’s actions that are perceived to be escalating geopolitical risks. The US dollar index has fallen from 99.50 on Monday to 98.26 today.
The US president spent a week trashing allies and trade relationships. He announced he was forming the (Donald J Trump) Board of Peace and issued invitations to nations inviting them to join, while simultaneously threatening to invade Greenland. Very peaceful indeed.
The 35 nations that have accepted reads like a Who’s Who of Nations that Trump once described as “sh##hole countries.” Of course, many may have accepted before they found out a seat would cost them $1.0 billion.
Canada was invited, then promptly uninvited after Mark Carney’s speech in Davos. Trump tweeted on Truth Social: “Please let this letter serve to represent that the Board of Peace is withdrawing its invitation to you regarding Canada’s joining what will be the most prestigious Board of Leaders ever assembled, at any time.”
Obviously, Trump was irked because Carney’s speech garnered a standing ovation while his speech was mocked.
WTI traded firmer in a 59.53-60.59 range and is at the top of that band in NY. Prices were on a rollercoaster this week as risk sentiment ebbed and flowed. Prices rallied overnight after Trump boasted that he had an “armada” heading toward Iran. The USS Abraham Lincoln and several guided missile destroyers are expected in the Middle East by Monday.
That begs the question: Why is a confirmed draft-dodger, a man too afraid to serve his country, so eager to send the sons and daughters of other Americans into harm’s way?
Canada’s November Retail Sales numbers rose a tick more than expected, 1.3% m/m (forecast 1.2%) while Retail Sales ex-autos rose 1.7% compared to 1.2% predicted, Nevertheless, they results are not likely to have any bearing on the BoC monetary policy decision on January 28.
Michigan Consumer Sentiment headline index is expected to be unchanged at 54, as are its 1- and 5-year inflation forecasts of 4.2% and 3.4%, respectively.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish below 1.3800 and looking for a move below 1.3760 to extend losses to 1.3710. A break above 1.3800 targets 1.3850.
The medium-term technicals are suggesting that USDCAD is oversold and due for a bounce. A topside break would extend gains to 1.3540 then 1.3890. A move below 1.3760 targets 1.3720 .
For today, USDCAD support is at 1.3760 and 1.3720. Resistance is at 1.3820 and 1.3850.
Today’s Range: 1.3730-1.3820
Markets Eyeing Upcoming FOMC meeting.
The FOMC meeting is next Wednesday, and the recent US data didn’t give policymakers any incentive to lower interest rates. The US dollar has dropped across the board this week, so the prospect of unchanged rates with a somewhat hawkish statement could give the greenback some support. But that depends upon Trump. He could abruptly announce his pick for Fed Chair (he said he has someone in mind), and Powell could announce he will finish his term as a Governor. That would cause a kerfuffle.
Total Access
Trump is at it again. He spent a lot of time last year trying to negotiate a peace deal between Russia and Ukraine but largely excluded Ukraine from the talks. He dusted off that playbook and announced he had secured “total access” to Greenland. Neither Greenland nor Denmark were involved in the deal.
Taking Stock
Asian equity markets extended gains overnight. Australia’s ASX 200 rose 0.13%, Japan’s Topix gained 0.37%, and the Hong Kong Hang Seng climbed 0.45%.
As of 5:30 am PT, European bourses are trading negatively (mainly due to profit-taking after this week’s gains), led by a 0.29% decline in the French CAC-40. The German DAX and the UK FTSE 100 are flat. S&P 500 futures are down 0.19%, the US Dollar Index is 98.31, the 10-year Treasury yield is 4.242%, and gold (XAUUSD) is 4938.81, after touching 4967.48 overnight.
EURUSD
EURUSD rallied yesterday and then traded sideways in a 1.1728-1.1759 range. Prices are supported by the modest easing of tensions between Europe and Trump and because of decent Eurozone PMI numbers. Manufacturing PMI rose to 49.4 from 48.8, Composite PMI was unchanged at 51.5, while Services PMI slipped to 51.9. The intraday EURUSD technicals are bullish above 1.1700 and looking for a break above 1.1770 to extend gains to 1.1820.
GBPUSD
GBPUSD rose from 1.3483 to 1.3537 on the heels of Retail Sales rising 2.5% y/y in December and 0.4% m/m. In addition, prices are getting additional support from broad US dollar weakness and bullish technicals. The move above resistance at 1.3510 suggests further gains to 1.3580.
USDJPY
USDJPY had a wild session, trading in a 157.39-159.23 range thanks to domestic politics and the central bank. The BoJ left its benchmark rate unchanged at 0.75%, which was mostly expected, with one board member voting to raise rates. USDJPY soared, then promptly sank, with some traders fretting about possible BoJ intervention. The statement was considered somewhat hawkish and pointed to higher rates. Prime Minister Sanae Takaichi dissolved parliament and called a snap election for February 8, which added to the volatility.
AUDUSD
AUDUSD remained perky inside a 0.6834-0.6854 range. The currency pair is in demand due to higher commodity prices, particularly gold, the outlook for further USDCNY losses, and the generally soft US dollar bias.
USDMXN
USDMXN traded sideways in a 17.4374-17.4973 range, supported by higher-than-expected inflation data yesterday (actual Core CPI 0.43%, forecast 0.39%, previous 0.31%). The results may encourage Banxico to pause cutting rates in the near term.
China
PBoC Fix: 6.9929 vs exp. 6.9481 (prev. 7.0014
Shanghai Shenzhen CSI 300 fell 0.45% to 4702.50
PBoC fixes USDCNY below 7.000 for the first time in 40 months which analysts suggest is a signal that authorities will allow the yuan to rise further.
FX open high low
FX Heat Map (6:00 am) -one week
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
