May 28, 2026
USDCAD open: 1.3866, overnight range 1.3837-1.3870, close 1.3841
USDCAD rallied on renewed risk aversion tied to escalating Iran/U.S. tensions, but geopolitics wasn’t the only factor weighing on the loonie. Ongoing Canada/U.S. trade talks continue to sputter while fresh chatter surrounding Alberta separation risks added another layer of political uncertainty.
U.S. Trade Representative Jamieson Greer continues to blame Canada for the lack of progress in negotiations, arguing Washington remains irritated that Canada and China were among the few countries to retaliate after Trump launched his tariff war. Ottawa increasingly appears to believe that any agreement with the Trump administration isn’t worth the paper it’s written on. America’s word is no longer its bond — it’s pure Teflon. Nothing sticks.
The Canadian dollar is also being undermined by softer commodity prices, particularly gold, which has fallen 3.21% over the past five days. Bullion remains under pressure amid growing expectations that U.S. interest rates will stay higher for longer alongside the firmer U.S. dollar.
WTI prices chopped around in an 89.37–92.51 range. Iran/U.S. headlines drove most of the volatility, although downside pressure found support from a 2.8 million barrel decline in U.S. crude inventories, following the previous week’s massive 9.1 m/b drawdown.
Canada’s economic calendar is empty today.
USDCAD Technical Outlook
USDCAD intraday technicals are bullish above 1.3840, targeting a break through the upper Bollinger Band at 1.3890 to open a run toward 1.3960. The 4-hour RSI at 92.01 is extreme overbought, well above the 85 threshold warning that the rally is overextended and vulnerable to a pullback. A retreat below 1.3840 shifts focus to trendline support at 1.3800 and the 100 and 200 moving averages clustered at 1.3780-1.3800.
Longer term, USDCAD is extending gains within the well-defined rising channel from the late-April lows. The daily RSI at 87.88 signals USDCAD is extremely overbought.
For today, USDCAD support is at 1.3830 and 1.3800. Resistance is at 1.3890 and 1.3920. Today’s range: 1.3820-1.3890.
FX Heat Map
FX open high low 6:00 am
Data and the Greenback
The US dollar opened in NY with gains across the board due to another bout of risk aversion after the Iran/US ceasefire did not cease-firing overnight. Instead, the US claimed to have attacked and “obliterated” some Iranian missile sites while shooting down many Iranian drones. Meanwhile, the Iranian Navy, which Trump claims is at the bottom of the sea, forced four ships to turn back and fired on a US tanker, which forced it to retreat, as well. A US airbase also came under attack.
April core PCE price index data ticked up to 4.4% q/q (forecast and previous 4.3%) but monthly core CPI rose just 0.2% instead of the expected 0.3%. Weekly jobless claims rose 5,000 to 215,000, while April Durable Goods Orders, ex-transportation rose 1.1% compared to the forecast of 0.5%.
Taking Stock
Asian equities suffered risk aversion and closed in the red. Australia’s ASX 200 plunged 1.43%, Hong Kong’s Hang Seng lost 1.27% and Japan’s Topix fell 0.41%.
As of 5:35 am PT, European bourses are under water. The FTSE 100 has dropped 1.12%, the German DAX has lost 0.71%, and the French CAC 40 is down 0.69%. S&P 500 futures are down 0.16%, the 10-year Treasury yield is 4.481%, DXY is 99.22 and gold (XAUUSD) is 4,399.79.
EURUSD | Range 1.1586-1.1635
EURUSD bottomed out when risk aversion sentiment peaked over escalating tension between the US and Iran. Prices continue to derive some support from expectations that the ECB will hike rates by 25 bps on June 11 due to rising inflation risks from higher energy costs. Eurozone economic confidence and consumer confidence data were little changed and still depressed.
GBPUSD | Range: 1.3367-1.3431
GBPUSD dropped on broad US dollar safe-haven demand, then clawed back some of the losses as the latest Iran/US hostilities may have merely been a speedbump on the way to a deal. UK political uncertainty has faded from the headlines, which removes a weight off sterling. The intraday technicals are bearish below 1.3470.
USDJPY | Range: 159.35-159.65
USDJPY rallied in Asia and then retreated in Europe inside a narrow band due to both safe-haven demand for US dollars and higher oil prices. Bullish enthusiasm was tempered by BoJ intervention risk.
AUDUSD | Range: 0.7098-0.7145
AUDUSD traded negatively in Asia, then recouped its losses in Europe. The bottom was seen on the initial reaction to the Iran/US news but rebounded as tensions eased. AUDUSD gains are slowed by downgraded risks for another RBA rate hike after the latest inflation report came in lower than expected.
USDMXN | Range: 17.3575-17.4395
USDMXN is trading with a bid this morning due to broad-based risk aversion sentiment. The currency pair continues to be underpinned by caution around the upcoming USMCA trade talks.
CHINA
- USDCNY Fix: 6.8240 vs exp. 6.7861 (prev. 6.8291).
- Shanghai Shenzhen CSI 300 rose 0.12%
PBoC instructed banks to increase lending, a move designed to pump money into the economy with resorting to lowering interest rates.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
