May 27, 2026
USDCAD open: 1.3825, overnight range 1.3804-1.3840, close 1.3813
USDCAD traded with a modest bid but remained inside its well-defined range. USDCAD is supported by the widening US and Canada interest rate differentials. The Fed has adopted a hawkish bias while the BoC ‘s ability to raise rates is hampered by a weak job market.
On Tuesday, Bank of Canada Deputy governor Nicolas Vincent warned that the domestic job market was entering into a low hire, low fire environment. He said that in a normal environment, elevated unemployment implies economic slack which could be addressed by lower rates. But not if the unemployment is being caused by structural changes.
WTI oil prices drifted lower in an 88.55-93.68 band. The selling pressure continued in early NY trading and stems from optimism that a US and Iran deal is close, which alleviated concerns about declining global crude inventories.
The Canadian economic calendar is empty.
USDCAD Technical Outlook
The intraday technicals are bullish above 1.3800 and looking for a move through the 1.3850-60 zone to target 1.3950, then 1.4000. However, momentum indicators suggest USDCAD is overbought and may continue to consolidate. A move below 1.3800 puts 1.3760 in play, again.
The daily technicals are bullish above the 100-day and 200-day moving averages at 1.3781, 1.3800, respectively. and extending gains within the rising channel from the late April lows. The daily RSI at 83.49 is approaching the extreme overbought threshold of 85, warning that upside momentum is waning.
For today, USDCAD support is at 1.3810 and 1.3770. Resistance is at 1.3860 and 1.3890. Today’s range: 1.3770-1.3870.
FX Heat Map
FX open high low 6:00 am
FX Markets are Tepid
FX traders lacked motivation and it showed in trading activity overnight. The US opened in NY on a mixed note but not far from where prices closed yesterday.
There are no real developments in the US and Iran war. Iran delegates returned from Qatar and are discussing the latest US proposal, but officials say that the “fundamental principle is a distrust towards America.” That sentiment was reinforced Monday when the US attacked Iran again.
But progress is being made. The Bloomberg tracker shows 5 ships are making the transit through the Strait of Hormuz, which has helped drive crude prices lower.
The US economic calendar is empty leaving surging AI stock valuations and caution ahead of tomorrow’s US PCE price index data to dictate direction.
Taking Stock
Asian equities indexes closed with Australia’s ASX 200 rising 0.69% while Hong Kong’s Hang Seng dropped 1.06% and Japan’s Topix falling 0.52%.
As of 5:30 am PT, European bourses have retreated from the earlier peaks. The French CAC 40 is up 0.66%, the German DAX has gained 0.19% and the UK FTSE 100 is flat. S&P 500 futures climbed 0.36%, the 10-year Treasury yield is 4.459%, DXY is 98.98 and gold (XAUUSD) is 4,452.22
EURUSD | Range 1.1625-1.1661
EURUSD drifted higher on hopes that the US and Iran will reach a peace agreement allowing the Strait of Hormuz to fully reopen. Prices continue to be underpinned by speculation that the ECB raises rates in June while steady to firm US Treasury yields slow gains.
GBPUSD | Range: 1.3430-1.3460
GBPUSD is trading at its session low in early NY markets as the ongoing geopolitical tensions continue to support the greenback while limiting sterling gains. The BoE is still expected to hike rates twice this year which is providing some support.
USDJPY | Range: 159.18-159.45
USD/JPY is probing the top of the overnight band with gains driven by higher US Treasury yields, and the lack of a resolution to the US and Iran war. The Fed has adopted a somewhat hawkish stance while the BoJ is reluctant to raise its benchmark rate.
AUDUSD | Range: 0.7124-0.7180
AUDUSD came under pressure because of lower-than-expected inflation in April (CPI actual 4.2% y/y, forecast 4.4%, March 4.6%) which lowered the risk of another RBA rate hike. The currency also suffered from AUDNZD selling after the RBNZ delivered a “hawkish hold.” They left rates unchanged at 2.25% in a 4-3 vote.
USDMXN | Range: 17.2852-17.3276
USDMXN trading was uninspired and the price action mirrored broad US dollar sentiment. The lingering impact of Moody’s downgrading Mexican debt to just above junk has put a damper on peso demand.
CHINA
- USDCNY Fix: 6.8291 vs exp. 6.7883 (prev. 6.8288).
- Shanghai Shenzhen CSI 300 fell 0.80% to 4,908.17.
Xinhua reported China’s industrial profits for major industrial firms (annual business revenue of $2.7 million) combined profits rose over 18.2% in Q1.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
