June 1, 2026
USDCAD open: 1.3817, overnight range 1.3788-1.3838, close 1.3800
USDCAD climbed alongside renewed US dollar demand against the majors after Iran and the US violated their ceasefire agreement. But the greenback is also bid because investors are increasingly viewing the Middle East tensions and the inflation spike from higher oil prices as just an irritant, offset by rising equity earnings, especially those from AI and Tech stocks.
USDCAD is also underpinned by lingering negativity after the economy shrank for the second consecutive quarter. Canada GDP fell 0.1% y/y in Q1 and by 0.1% m/m in March. Recession, anyone?
WTI oil prices traded in an 88.71-91.25 range and are sitting at 89.95 in early NY trading. The gains followed news that Iran and the US violated their ceasefire agreement. Prices dropped after neither side escalated.
USDCAD Technical Outlook
The intraday technicals are bullish above 1.3810 but the failure to take out resistance in the 1.3850 area suggests risk/reward favours the downside.
On the daily chart, USDCAD is pressing the upper Bollinger Band at 1.3887, and the RSI is approaching overbought warning of a retest of support in the 1.3760 area.
For today, USDCAD support is at 1.3800 and 1.3760. Resistance is at 1.3840 and 1.3860. Today’s range: 1.3770–1.3850.
FX Heat Map
FX open high low 6:00 am
Iran and US War
The US violated its ceasefire on the weekend when it attacked an Iranian missile site. Iran said it retaliated by attacking a US military base in the region. The news lifted WTI oil prices by 4.0%. It also gave the greenback a bit of a boost against the majors.
It is a big week for data thanks to the release of the US nonfarm payrolls report Friday when 85,000 new jobs are expected (April 115,000).
S&P 500 futures are up in early trading. The latest clash between Iran and US is viewed as an inconvenience by American traders due to its negative impact on inflation. However, AI and tech stock driven gains has provided them with an inflation cushion so to them the war is just an inconvenience.
Today ISM Manufacturing PMI (forecast 53, vs April’s 52.7) is the key US data point which should provide additional support for Wall Street.
Former Fed Chair and current Fed governor Jerome Powell accepted the John F. Kennedy Profile in Courage Award on Sunday. He warned “If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well,” and the Fed would lose its credibility.
Taking Stock
Asian equities finished mixed. Japan’s Topix fell by 0.42%, the Hong Kong Hang Seng rose 0.86% and the Australian ASX 200 finished flat.
As of 5:30 am PT, European bourses are mostly higher. The German Dax is up 0.47%, the French CAC 40 has gained 0.31% while the UK FTSE 100 is down 0.25%. S&P 500 futures are up 0.20%, the 10-year Treasury yield is 4.45%, DXY is 99.05, and gold (XAUUSD) is 4,502.69.
EURUSD | Range 1.1641-1.1665
EURUSD traded defensively in a narrow band as competing forces kept the pair from establishing a clear direction. The latest US/Iran hostilities underpinned the greenback while the expected ECB rate hike on June 11 provided some support. The ECB’s June report shows Eurozone consumers expect near-term inflation to remain stuck at an elevated 4.0%, driven by persistent cost-of-living and energy pressures. German Retail sales were as expected while May manufacturing PMI ticked up to 51.6 from 51.4.
GBPUSD | 1.3446-1.3476
Sterling was directionless inside its well-traveled band. The overnight flare-up in the Middle East reversed the oil-driven relief rally that had characterised the final week of May. Last week, BoE Bailey said the bank is content to wait for clearer data before adjusting policy.
USDJPY | Range: 159.31-159.50
USDJPY is flirting with the top of its overnight range with prices continuing to be supported by Fed/BoJ interest rate differentials and higher oil prices. Traders remain wary of intervention after Finance Minister Katayama warned Friday that authorities stand ready to take decisive action against excessive yen volatility. Jibun Bank Manufacturing PMI was unchanged at 54.5.
AUDUSD | Range: 0.7170-0.7191
The Australian dollar held its ground despite the overnight deterioration in risk sentiment, following the news that the US and Iran exchanged missiles. The TD-MI inflation gauge rose to 4.4% in May from 4.3% in April
USDMXN | Range: 17.3177-17.3691
USDMXN drifted higher after news of the latest US and Iran hostilities lifted oil prices, then reversed the move with when oil prices retreated.,
CHINA
- 6.8167 vs exp. 6.7643 (prev. 6.8176)
- Shanghai Shenzhen CSI 300 fell 0.98% to 4844.26
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
