February 26, 2026

USDCAD open: 1.3681, overnight range 1.3659-1.3689, close 1.3677

USDCAD drifted aimlessly in another uneventful overnight session. FX traders appear reluctant to get involve due to a lack of top-tier economic data.

US Trade Representative Jamieson Greer is already demanding that any Canada US trade deal must include tariffs. He wants Canada to open up its markets to the US while America uses tariffs to shield its market.

The US tariff war has led to Prime Minister Carney travelling to India on Friday. He wants to reset the fractured relationship and negotiate a comprehensive free trade agreement.

Canada’s Q4 Current Account deficit narrowed by $4.6 billion to $0.7 billion due to a significant reduction in the trade.

US weekly jobless claims report rose 4,000 to 212,000. Neither the US or Canadian numbers had any impact on USDCAD trading.

USDCAD Technical Outlook

The intraday USDCAD technicals are rangebound in a 1.3630-1.3730 They are mildly bullish while trading above 1.3650 and need to break above 1.3730. Failure to do so suggests another test of support at 1.3630. A break either side of the bands is worth about 50 points

The medium-term technicals are bearish below 1.3755-1.3800, leaving prices trapped inside a broad 1.3480-1.3780 band. A break below 1.3585 would reopen downside risk toward 1.3500 and 1.3400, while a sustained break above 1.3800 would argue for a move toward 1.3900.

For today, USDCAD support is at 1.3660 and 1.3630. Resistance is at 1.3710 and 1.3730.

Today’s Range: 1.3660-1.3730

War Drums Beating

Its 2003, all over again. The Trump administration looks like it dusted off the George W Bush playbook.

The odds for the US attacking Iran are rising. Trump hinted at military action in his State of the Union speech. After claiming that the US obliterated Iran’s nuclear weapons program last June, he spoke about how they killed American service members and said, “After Midnight Hammer, they were warned to make no future attempts to rebuild their weapons program… yet they continue… They’re starting it all over.” He is also claiming that Iran is developing a missile that can strike the US.

Now various senior White House officials, including VP Vance, are claiming Iran is trying to rebuild its nuclear weapons program. Those comments are eerily similar to the dire warnings by US officials in 2003 about Iraq’s “Weapons of Mass Destruction,” which is how the George W. Bush government justified attacking Iraq. The WMD never existed.

Iran and the US are reportedly negotiating today.

Taking Stock

Asian equity markets closed mixed. Japan’s Topix rose 0.97%, Australia’s ASX gained 0.52%, while the Hong Kong Hang Seng closed down 1.44%.

As of 5:30 am PT, European bourses are higher. The French CAC-40 has climbed 0.82%, followed by the German DAX with a 0.44% gain and the UK FTSE 100, which is up 0.14%. S&P 500 futures are up 0.10%, the US Dollar Index is at 97.65, the 10-year Treasury yield is 4.043%, and gold (XAUUSD) is 5,169.98

EURUSD

EURUSD traded defensively in a 1.1771–1.1829 range due to general US dollar strength. Eurozone Economic Sentiment was unchanged at 98.3. ING analysts suggest that the drift lower is merely caution and nothing to worry about. The EURUSD short-term technicals are bullish while prices are above 1.1740.

GBPUSD

GBPUSD dropped from 1.3575 in Asia to 1.3517 on general US dollar strength stemming from Nvidia’s quarterly earnings at the close of business in NY, improving and underpinning demand for US dollars. The move was exacerbated by comments from BoE MPC member Megan Greene, who opined that following the Fed’s interest rate direction may not be the best idea, adding that she thought the BoE should do the opposite.

USDJPY

USDJPY retreated from 156.47 to 155.71 after Bank of Japan Governor Kazuo Ueda reiterated that interest rates would rise if the economy meets the BoJ’s economic projections. He said that the Bank did not need to await the April Tankan report to decide, implying that rates could go higher in the near term.

AUDUSD

AUDUSD traded in a 0.7110–0.7137 range, peaking in Asia before retreating to the session low in early NY trading. The currency remains bid on fresh expectations that the RBA will raise rates again, following yesterday’s higher-than-expected inflation readings. AUDUSD is at a level last seen at the beginning of January 2023. A decisive break above 0.7160 targets the 0.7280–0.7300 area.

USDMXN

USDMXN was uninspired in a 17.1540-17.1877 range mainly due to quiet FX trading across the G-10 currency spectrum. Mexico’s jobless rate rose from 2.4% in December to 2.7% in January. Yesterday, Banxico Deputy Governor Galia Borja suggested that the central bank had room to cut interest rates due to a weak economy.

China

USDCNY Fix: 6.9341 vs expected 6.8824, (previous 6.9414).

Shanghai Shenzhen CSI 300 fell 0.19% to 4,726.87

German Chancellor Merz is continuing efforts to strengthen relations with China, which has been Germany’s largest trading partner since last year.

However, Germany runs a significant trade deficit with China. In 2025, imports from China rose 8.8%, while German exports to China fell 9.7%.

Following his meeting with President Xi Jinping, Merz said China agreed to purchase up to 120 Airbus aircraft.

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