July 22, 2025
USDCAD open: 1.4097, overnight range 1.4083-1.4112, close 1.4107
USDCAD is underpinned by Trump’s latest tariff attack on Canada which will be exacerbated when a new round of US tariffs gets levied on US trading partners.
Trump is planning a two-tiered duty system of between 10% and 12.5% to replace is illegal Liberation Day tariffs. The new tariffs are justified because, according to the Americans, at least 45 major economies are failing to enforce a prohibition on the importation of goods made with slave labour. A coalition of 22 state attorneys general argues that the tariffs are an illegal abuse of power.
Canada’s reaction to the tariff announcements has been muted.
WTI oil prices traded in a 84.48-88.61 range and are trading at 87.28 in NY. The escalating Middle East crisis and the closure of two key oil transportation waterways has underpinned prices.
The US dollar is trading with a bid due to safe-haven demand after Trump said he wasn’t in a hurry to resume talks with Iran.
USDCAD Technical Outlook
The intraday USDCAD technicals are bullish inside a short-term uptrend channel bound by 1.4080 and 1.4150. A decisive break below 1.4080 suggests a revisit to the 1.4000-1.4020 area. A move back above 1.4110 targets the 1.4150
Longer term, USDCAD remains in an uptrend from the June low near 1.3600 and supported by prices being above the100 day moving average (1.3865) and 200-day (1.3847).
For today: USDCAD support is at 1.4080 and 1.4030. Resistance is at 1.4120 and 1.4150.
Today’s expected range is 1.4050-1.4150
FX Heat Map
FX open high low 6:00 am
Disruptor-in-Chief
The Trump administration plans to impose new Section 301 tariffs on imports from 60 major trading partners, citing inadequate enforcement of forced labour laws. Proposed rates are 10% for Canada, Mexico, the EU and UK, and 12.5% for China, India and Japan. The measures remain subject to public consultation before implementation.
Taking Stock
In Asia, Japan’s Topix closed with a 0.45% gain and Australia’s ASX 200 rose 0.34%. Hong Kong’s Hang Seng index lost 0.95%.
As of 5:30 am PT, European bourses are rallying. The UK FTSE 100 index is up 1.39%, the French CAC 40 has gained 0.93% and the German DAX has is up 0.31%. S&P 500 futures are down 0.45%, the 10-year Treasury yield is 4.638%, the DXY is 101.13 and gold is 4,127.65.
EURUSD | Range 1.1397-1.1418
EURUSD nursed some losses and reclaimed the 1.1400 handle after the DXY pulled back slightly from a one-week high, though the rebound remained limited amid light catalysts for the bloc. The ECB is expected to keep rates unchanged at Thursday’s meeting, though rising oil prices have fueled speculation of a September hike . The European Commission also reportedly plans to impose its first Digital Markets Act fine on Google (GOOGL) on Thursday, which could weigh on EU tech sentiment but also distract from ECB policy focus.
GBPUSD | Range 1.3366-1.3396
Sterling is chopping around between its 100-day moving average (1.3379) and the 200 day at 1.3344. The latest UK inflation data painted a mixed picture: headline CPI eased to 2.6% in June (from 2.8%), while core CPI held steady at 2.6% and services inflation edged down to 3.6%. Producer input prices fell sharply to 7.3% y/y. The softer headline CPI and declining input costs give the Bank of England room to remain on hold
USDJPY | Range 162.67-163.23
USDJPY took a breather after surging past 163.00 to a near-40-year high of 163.24, driven by firmer U.S. Treasury yields and rising oil prices. The elevated risk of further crude supply disruptions from the Middle East conflict is hampering the BoJ’s ability to normalize policy, and traders remain on intervention alert.
AUDUSD | Range 0.6990-0.7013
The Australian dollar traded narrowly in a tight band. Traders are looking ahead to Thursday’s employment data while remaining cautious due to escalating geopolitical tensions.
USDMXN | Range 17.3920-17.4322
USD/MXN is trading a tad lower following Trump’s tariff actions against Canada which appears to give Mexico a bit of a trade advantage.
CHINA
- PBoC Fix: 6.7933 vs exp. 6.7737 (prev. 6.7917)
- Shanghai Shenzhen CSI 300 fell 0.46% to 4,717.24
Geopolitical turmoil was countered by the PBOC who set the fix at 6.7933 lower against a backdrop of mixed domestic data and steady accommodative policy.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
