June 16, 2026

USDCAD open: 1.4004, overnight range 1.3985-1.4019, close 1.3993

USDCAD has recouped its early NY losses and is back at its overnight session peak on the heels of sliding crude prices even though the US dollar sees selling from ongoing safe-have trade unwinding. Rising hopes that the US and Iran Memorandum of Understanding will lead to a fully reopened Strait of Hormuz is weighing on the greenback.

USDCAD downside is underpinned by divergent Fed and BoC monetary policies which have widened CAD/US interest rate differential in favour of the US dollar. That could change tomorrow if Fed Chair Kevin Warsh exploits the end of the US/Iran war to argue oil-fueled inflation will ease quickly and rates will go lower.

WTI oil prices continue to leak lower on anticipation that oil tankers will soon be moving unimpeded through the Strait of Hormuz. WTI has fallen from 84.44 at Friday’s close to 77.54 so far, in NY today. Analysts from Morgan Stanley, Goldman Sachs and Citi bank are competing to see who can cut Brent oil price forecasts the deepest. At the moment, Citibank is winning with a prediction of 75/b in Q3. Qatar expects to restore 80% of its NG output within two months.

Today’s US data: May building permits (actual -0.7%m/m, April 4.4%),and housing starts (actual 11.2%, vs 8.8% in April).

USDCAD Technical Outlook

The intraday technicals are bullish above 1.3940 but the rally has stalled below 1.4035. The 4-hour chart shows USDCAD pinned near the upper 3^rd SD Bollinger Band at 1.4029 after pushing to fresh highs, with momentum still constructive but flattening. The 4-hour RSI and MACD are signalling that USDCAD is consolidating its gains rather than extending. A break below 1.3940 targets the rising channel support near 1.3905.

Longer term, USDCAD is bullish above 1.3810, the 200-day moving average, with the ascending channel from the May low still firmly intact. The daily MACD confirms the bullish bias.  However, the daily RSI, is once again, extremely over-bought and warning of a corrective pullback rather than easing it.

For today: USDCAD support is at 1.3940 and 1.3910. Resistance is at 1.4020 and 1.4050. Today’s expected range is 1.3960-1.4030

FX Heat Map

FX open high low 6:00 am

Moving On-Cautiously

Global markets are shifting from angst around the US and Iran war to the prospect for the Fed under Kevin Warsh. Markets are pricing in Fed rate hikes but Warsh was hand-picked by Trump to cut rates.

Trump proclaimed that the Iran war was over and that the Strait of Hormuz was fully open, yet only 1 ship has sailed through in the past 24 hours. Trump’s deal with Iran is merely a memorandum of understanding, described by Vice President Vance as “a page and a half, general document.”

Taking Stock

Asian equity markets closed flat to down. Japan’s Topix dipped 0.21%, the Hong Kong Hang Seng Index fell 1.40%, and the Australian ASX 200 closed flat.

As of 5:40 am PT, the French CAC 40 is up 0.71%, the German DAX has gained 0.46%, and the UK FTSE 100 is up 0.59%. S&P 500 futures are flat, the 10-year Treasury yield is 4.434%, the DXY is 99.66, and gold (XAUUSD) is 4,349.73.

EURUSD | Range 1.1575-1.1613

EURUSD is adrift ahead of Wednesday’s FOMC decision. Traders are torn between buying the single currency on dovish comments from Fed Chair Warsh or selling it if he sounds hawkish due to inflation. Warsh was appointed by Trump to lower rates, so it stands to reason he will use the end of the Iran war as the premise for a dovish bias. German ZEW Economic sentiment climbed 20 points to 10.5 from -10.2 on hopes for an early end to the US Iran conflict.

GBPUSD | Range 1.3390-1.3432

Sterling found a floor in Asia then climbed steadily into the NY open, supported by the positive risk sentiment from the end of the Iran/US war. Traders are also cautious ahead of Thursday’s BoE meeting where policymakers are expected to offer a dovish outlook for rates due to economic weakness.

USDJPY | Range 160.05-160.38

USDJPY dropped at the Asia open then recouped the losses after the BoJ raised its benchmark rate by 25bps to 1.00%, a 31-year high. The news was expected and it was considered a “dovish” hike as one person voted against the move while no others voted for a more aggressive hike.

AUDUSD | Range 0.7042-0.7079

Aussie dropped then rallied back to yesterday’s closing 0.7046 closing rate, mainly due to the RBA decision to leave rates unchanged at 4.25%, which was widely expected. Policymakers complained that inflation was still too high and threatened to hike if needed. AUDUSD received additional support from a softer US dollar vs the majors as safe-haven trades continued to be unwound.

USDMXN | Range 17.1823 -17.2372

USDMXN traded sideways but with a bearish bias as risk sentiment improved following the supposed end to the US/Iran war. USDMXN is just above support in the 15.00 area and the upcoming USMCA negotiations may slow losses.

CHINA

• PBoC Fix:  6.8108 vs exp. 6.7605 (prev. 6.8088)
• Shanghai Shenzhen CSI 300 fell 0.15% to 4,884.23

May Retail sales fall 0.6% (forecast 0, April 0.2%y/y) due to weaker auto sales. Industrial Production rose 4.5% y/y compared to the forecast of a 4.3% gain, and 4.1% in April due to higher Al and tech exports.

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview