May 19, 2026
USDCAD open: 1.3764, Range-Mon/Tues: 1.3733-1.3772, close 1.3740
USDCAD caught an updraft due to fears of renewed U.S.-Iran hostilities and rising global bond yields. Trump’s Iran war threats have sparked fears of a global inflation spiral, with central bankers weighing the need to hike interest rates to combat rising prices.
Canada’s April CPI came in at 2.8% year-over-year, up from 2.4% in March but below the 3.1% forecast, leaving the Bank of Canada with little urgency to shift its rate stance, for now. The headline increase was driven almost entirely by energy, with gasoline surging 28.6% as Middle East supply fears and the lapse of the carbon levy base effect combined to inflate the number. Strip out gasoline and prices rose just 2.0%. All three core measures, trim, median, and common, held below 2.6% and continued trending lower, pointing to underlying inflation that remains well contained.
WTI oil prices traded in a 102.16-104.09 range. The low was hit after Trump said he would delay attacking Iran, although the pullback was shallow.
USDCAD Technical Outlook
USDCAD intraday technicals are bullish while trading above 1.3700, targeting a break above 1.3790 to extend gains toward 1.3850. The momentum indicators are suggesting upside momentum may be fading. Failure to break decisively above 1.3790 shifts focus back to 1.3700.
The longer-term technicals are bullish above the 100-day moving average at 1.3720, with but facing resistance from the upper Bollinger Band at 1.3810. The 200 SMA at 1.3814 and the upper Bollinger Band represent formidable resistance in the near term.
For today, USDCAD support is at 1.3720 and 1.3700. Resistance is at 1.3780 and 1.3820. Today’s range: 1.3720-1.3820.
FX Heat FX open high low 6:00 am
FX open high low 6:00 am
Recap: Monday and Overnight
Monday markets started in risk-off mode as escalating U.S.-Iran tensions sent oil prices and global bond yields higher while hammering equities. The mood improved somewhat after reports surfaced that Pakistan was mediating revised Iranian proposals to Washington, but investors remained cautious. European and U.S. equity futures stayed underwater.
Overnight, it was more of the same. Traders stayed defensive as they grappled with Middle East tensions, sticky inflation, and rising bond yields. Equities showed surprising resilience despite tighter financial conditions, while the U.S. dollar traded unevenly as higher Treasury yields battled growing concerns about America’s deteriorating fiscal outlook and debt trajectory.
Meanwhile, it’s Day 2 of the G-7 Finance Minister’s meeting in Paris with concerns about public debt and bond market volatility at the top of the agenda.
Taking Stock
Asian equities closed higher led by a 1.17% rally in Australia’s ASX 200. Japan’s Topix rose 0.63% and the Hong Kong Hang Seng gained 0.48%.
As of 5:30 am PT, the German DAX is up 1.30%, the UK FTSE 100 has gained 0.56% and the French CAC 40 has risen 0.75%. S&P 500 futures have lost 0.42%, the 10-year Treasury yield is 4.624%, DXY is 99.22 and gold (XAUUSD) is 4,545.16.
EURUSD | Range: 1.1615–1.1663
EURUSD gave back Monday’s gains overnight and is trading with a bearish bias. The Paris G-7 Finance Ministers Summit is merely a distraction and there has not been any actionable quotes or directives.
GBPUSD | Range: 1.3387-1.3439
GBPUSD tracked the ebb and flow of risk off sentiment due to higher global yields and renewed geopolitical tension. UK political drama continues to add the occasional dollop of volatility and is limiting gains. The domestic employment picture was rather ugly as unemployment rose and wages tumbled.
USDJPY | Range: 158.74-159.17
USDJPY firmed as U.S. yields continued grinding higher and because of elevated oil prices. There are fresh concerns about a new supplementary budget, which is underpinning prices which makes it harder for the BoJ to justify intervention.
AUDUSD | Range: 0.7109-0.7177
AUD/USD traded lower on the back of softer equities, and mixed commodity performance. A firmer USD because of buoyant global yields and geopolitical uncertainty weighed on prices. The RBA minutes from May 5 did not offer any fresh insight.
USDMXN | Range: 17.2640-17.3415
USDMXN consolidated last week’s gains yesterday and overnight. Prices are underpinned by higher Treasury yields and the ongoing US and Iran tensions.
CHINA
- USDCNY Fix: 6.8375 vs exp. 6.7909 (prev. 6.8435)
- Shanghai Shenzhen CSI 300 rose 0.40% to 4,852.88
Trump boasted about a sweeping U.S.-China deal covering trade, investment, security, and market access. He said China would buy 200 Boeing jets and $17 billion/year in agricultural products. China did not publicly confirm those claims in the same detail and described the understandings as preliminary and focused on limited progress rather than the full set of commitments Trump outlined.
