February 3, 2026

USDCAD open: 1.3682, overnight range 1.3647-1.3685, close 1.3681

USD/CAD rallied yesterday on the heels of a steep rise in the U.S. ISM Manufacturing report (actual 52.6, December 47.9), which was its highest reading in over three years. Traders bought U.S. dollars across the board as the result was seen as further justification for the Fed to leave rates unchanged at the January 28 FOMC meeting.

Wednesday’s ADP report may have to do the heavy lifting for insight into the U.S. labor market, as the U.S. government shutdown means that Friday’s Nonfarm Payrolls release has been delayed.

The USD/CAD rally stalled at the 1.3705 mid-January downtrend line, partly because gold prices rebounded, rising from $4402.00 to $4,485 yesterday and extending the gains to $2,494.75 overnight. Analysts are divided as to whether gold prices have peaked or if the catalysts that fueled the original rally remain in place.

WTI oil traded sideways in a $61.13–$62.47 range. The question is how India’s buying more U.S. crude at the expense of sanctioned Russian oil will impact ongoing concerns of a first-half 2026 oil glut.

There are no top tier US or Canadian economic reports today.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish while prices are below 1.3705 and looking for a move below 1.3640 to extend losses to 1.3610.  A decisive break above 1.3705 targets 1.3710.

The medium term techncials suggest that the rally from 1.3480 is just a correction while prices remain under 1.3705. However, failure to move below 1.3600 would put 1.3800 in play.

For today, USDCAD support is at 1.3640 and 1.3610. Resistance is at 1.3705 and 1.3750

Today’s Range: 1.3640-1.3740

Trump Announces Trade Deal with India.

Trump announced a trade deal with India that lowers tariffs on Indian imports to 18% from 25% and eliminated the 25% additional tariff because India bought Russian oil.
Trump said, “The Prime Minister also committed to ‘BUY AMERICAN,’ at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. energy, technology, agricultural, coal, and many other products. Our amazing relationship with India will be even stronger going forward.” He claims India agreed to buy $500 billion of U.S. goods and cut its tariffs to zero.

Some analysts are speculating that the latest EU-India trade deal spooked Trump and encouraged him to act. Other analysts note that a Trump “deal” is never a binding contract but is usually self-promoting word salad with a limited shelf life.

Taking Stock

As of 7:10 am, European bourses are mixed. The German DAX is up 0.62% while the French CAC-40 has lost 0.13%, and the UK FTSE 100 is down 0.42%. S&P 500 futures are up a modest 0.11%, the US Dollar Index is at 97.62, the 10-year Treasury yield is 4.294%, and gold (XAUUSD) is at 4923.22.

EURUSD

EURUSD traded in a 1.1782-1.1825 range and is at its session low in NY. The single currency got a bit of support on news that the French parliament passed its 2026 budget. French and Spanish economic data had no impact. EURUSD technicals are bearish below 1.1870 with support at 1.1740.

GBPUSD

GBPUSD is consolidating last week’s gains in a 1.3658-1.3707 range but has a modest bearish bias while prices are below 1.3705. Sterling is taking its directional cue from broad US dollar sentiment but trading cautiously ahead of Thursday’s Bank of England interest rate decision. The BoE is widely expected to leave rates unchanged at 3.75% due to sticky inflation.

USDJPY

USDJPY traded in a 155.31-155.89 range. Prices consolidated Monday’s gains in Asia, then spiked to the session peak in Europe. Prices are underpinned by concerns that if Prime Minister Sanae Takaichi wins more seats in the upcoming election, her stimulus plans will limit the BoJ’s ability to tighten monetary policy.

AUDUSD

AUDUSD rallied sharply, rising from 0.6946 to 0.7050 in the wake of the RBA’s decision to raise its benchmark rate by 25 bps to 3.85%. The statement, which was considered hawkish, justified the hike because inflation picked up materially in the second half of last year, in part because of “greater capacity pressures.” Analysts are already projecting another hike in May. Prices retreated to 0.7005 by the NY open.

USDMXN

USDMXN traded defensively in a 17.3023-17.4096 range. Rebounding US stock markets and reduced Iran-US tensions weighed on prices, although the partial US government shutdown and lingering support from yesterday’s US ISM report supported prices.

China

PBoC Fix: 6.9608 vs exp. 6.9598 (Prev. 6.9695)

Shanghai Shenzhen CSI 300 rose 1.18% to 4660.11

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