January 26, 2026

USDCAD open: 1.3680, overnight range 1.3674-1.3713, close 1.3700

It’s a Snow Day for large parts of the US and Eastern Canada. Pearson airport received 50 cm’s of snow yesterday which is a record and that snowfall has wreaked havoc across the country.

Meanwhile, in FX land, USDCAD dropped despite Trump’s latest threat to impose 100% tariffs on Canada. That’s because global investors are showing signs that they are losing confidence in the Trump administration. Gold prices surged which helped to undermine USDCAD. Profit-taking has boosted USDCAD to as high as 1.3712 in NY

Trump’s derangement is on full display in his TruthSocial rants. 1) “China is successfully and completely taking over the once Great Country of Canada. So sad to see it happen. I only hope they leave Ice Hockey alone! President DJT

2)“A MUST WATCH. Canada is systematically destroying itself. The China deal is a disaster for them. Will go down as one of the worst deals, of any kind, in history. All their businesses are moving to the USA. I want to see Canada SURVIVE AND THRIVE! President DJT.

It gets worse.  A week ago, Trump praised Carney for making a deal with China to boost agricultural exports in return for dropping tariffs on Chinese EV’s in exchange for China allowing Canadian agricultural exports. This weekend, Trump threatened 100% tariffs on Canada if it makes a trade deal with China.

WTI traded in a 60.62-61.71 range supported by expectations of higher demand due the massive snowstorm and frigid weather in large parts of the US and Canada. The weak greenback also lifted crude prices.

US Durable Goods Orders rose 0.5% in November and Chicago Fed National Activity index was -0.4.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish below 1.3800 which is supported by the move through 1.3750 and again at 1.3710.  A break below 1.3650 would extend losses to 1.3600 but the momentum indicators suggest USDCAD selling is extremely overdone.

The medium-term technicals indicate USDCAD has broken its prior uptrend and remains vulnerable. A corrective bounce could extend toward 1.3800, while failure to hold above 1.3650 would open the door to a deeper move toward 1.3600.

For today, USDCAD support is at 1.3650 and 1.3610. Resistance is at 1.3710 and 1.3750.

Today’s Range: 1.3650-1.3750

Greenback Crushed and Gold Soars

Gold surged to a new peak overnight and is now up 20% YTD. The rally is due to Safe-haven demand from heightened geopolitical tensions, Trump’s threats to annex Greenland and attack Iran, which has ignited a crisis of confidence in the American administration.

Trump may be nuts but his inner circle’s plan to devalue the dollar and cut interest rates is working. Trump and his Justice Department’s actions toward the Fed and Chair Powell have succeeded in weakening the greenback because global investors have legitimate fears that the Fed will be politicized. A tame Fed Chair is necessary to achieve that objective, which is why BlackRock’s Chief Investment Officer Rick Rieder is now the front runner.

Soaring fears of Fed/BoJ intervention to sell US dollars and boost the Japanese yen reached new heights on Friday after reports that the BoJ and the New York Fed called banks and “checked rates.” That is a signal that joint intervention is on the menu. Traders reacted by bashing USDJPY, which led to broad based US dollar selling against the FX majors.

Taking Stock

Asian equity markets closed mixed. Japan’s Topix plunged 2.13%, the Hang Seng was flat and Australia’s ASX 200 was closed.

As of 5:30 am PT, European bourses are close to flat. The French CAC 40 is down 0.10%, the German DAX Is unchanged and the UK FTSE 100 is up 0.14%. S&P 500 futures are flat. The US Dollar Index is 97.25, the 10-year Treasury yield is 4.225%, and gold (XAUUSD) is 5065.95.

EURUSD

EURUSD closed at 1.1830 on Friday, rallied to 1.1898 in Asia then drifted down to 1.1836 in Europe. Fed/BoJ intervention concerns combined with safe haven demand for something other than the greenback fueled the EURUSD rally. German IFO Business Climate was unchanged at 87.6 in January. EURUSD remains bullish above 1.1810 and looking for further gains to 1.1920.

GBPUSD

GBPUSD is consolidating Friday’s gains in a 1.3643–1.3683 range. Prices are underpinned by broad US dollar weakness and expectations for a dovish Fed while the Bank of England leaves rate hikes on the table. A break above 1.3670 puts the September 17 peak of 1.3727 in play.

USDJPY

USDJPY plunged from 159.26 on Friday to 153.31 overnight and is responsible for the G 7 FX volatility. The risk, or reality, of joint Fed/BoJ intervention was reinforced after former internal affairs minister Sanae Takaichi added her voice to warnings about intervention. Additional intervention could drive USDJPY below 150.00 to 144.50, which is where it was in September.

AUDUSD

AUDUSD is consolidating its gains in a tight 0.6907–0.6933 range. Volumes were subdued as Australian markets were closed for Australia Day.

USDMXN

USDMXN moved lower in a 17.3350–17.400 range due to widespread USD selling pressure and US Mexico interest rate differentials, which favour Mexico. In addition, USDMXN may be lower after Trump turned his wrath on Canada. Mexico’s jobless rate fell to 2.4$ from 2.7%.

China

PBoC Fix: 6.9843 vs exp. 6.9292 (Prev. 6.9929)

Shanghai Shenzhen CSI 300 rose 0.09% to 4706.96

PBoC fixed 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.

Xi Jinping removed two top generals accusing them of corruption: Zhang Youxia, first ranked chairman of the Central Military Commission, and Liu Zhenli, Chief of the CMC’s Joint Staff Department. China’s supreme military command now consists of Xi and Vice Chair Zhang Shengmin.

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