October 22, 2026

USDCAD open (6:00 am): 1.4021, overnight range 1.4014-1.4050, close 1.4047

USDCAD has bounced from the bottom of its overnight range after grinding lower for the 6^th consecutive day. WTI oil prices flirting with a $100/ barrel helps, and so does the narrowing of CAD/US interest rate spreads but the more dominant catalyst is a widespread sell-off in the US dollar.

Prime Minister Mark Carney and Ontario Premier Doug Ford unveiled an $8.7 billion counter-tariff action plan to protect key industrial supply chains against U.S. tariffs and global trade volatility. The plan allocates $5.22 billion over five years to create a Joint Steel Action Fund to boost domestic purchasing and prevent foreign steel dumping, $2.5 billion over two years for automotive capital upgrades and EV transitions, and up to $2 billion to co-fund essential road infrastructure unlocking Northern Ontario’s mineral-rich Ring of Fire.

It’s an ambitious plan and both leaders have to tap into their respective “Magic Money Tree’s” due to existing historically large deficits.

WTI traded 97.75-100.08 overnight with the downside limited by ongoing Middle East hostilities. Washington ordered non-emergency staff out of Saudi Arabia, due to Houthi attacks and Iranian state TV claimed seven tankers were set ablaze in the Strait of Hormuz. The EIA reported crude stocks fell by 3.06 million barrels last week.

There is no Canadian data of note today.

US weekly jobless claims were a tad better than forecast, rising 194,000 (forecast at 200,000) but the news had little impact.

USDCAD Technical Outlook

The intraday USDCAD remain bearish below 1.4060, but the failure to extend losses below support in the 1.3990-1.4000 zone suggests a period of consolidation and a retest of the  1.4060 resistance area. selling is losing steam. The MACD and RSI suggest that the selloff has run its course for now.

Longer term, USDCAD is trying to carve out a base. The 100-day SMA at 1.4045 has held on a closing basis for two straight sessions, and the 50% Fibonacci support at 1.4019 has now been tested and defended. The daily RSI is still pinned at 17 for a fourth session, and the ATR has eased signalling that the selloff is running out of steam.

 That said, the downtrend from 1.4300 remains intact with a sequence of lower highs, and only a recovery above 1.4083 would confirm a bottom and put 1.4140 back in play.

 That said, the downtrend from 1.4300 remains intact with a sequence of lower highs, and only a recovery above 1.4083 would confirm a bottom and put 1.4140 back in play.

For today, support is 1.4015 and 1.3990. Resistance is 1.4060 and 1.4090.

Todays Range 1.4020-1.4090.

FX Heat Map

FX open high low 6:00 am

Nervous Traders Sell Greenbacks

The greenback is limping toward three-week lows after Fed officials made it clear there is no rush to hike at next week’s FOMC, and Treasury yields have retreated from their multi-year highs. Futures still lean toward one more hike before year end, so this is a pause in the hawkish narrative, not a rewrite of it.

Traders may also be leery ahead of the November 3 US mid-term election and the elevated risk of major drama if Republicans’ loose both the House and the Senate. Geopolitics added to the gloom. Reports that the US and Israel are planning renewed strikes on Iran after the midterms, Iran’s foreign minister demanding an end to the US naval blockade before any return to talks, and a string of tanker attacks kindling risk aversion.

Taking Stock

Asian stocks finished deep in the red. The Hang Seng plunged 3.0% to 22,934.68, Japan’s Topix dropped 1.14% to 3,997.50 and Australia’s ASX 200 fell 0.43% to 8,793.25.

As of 5:35 am PT, European bourses are lower with the French CAC-40 losing 1.12%. The German Dax is down 0.67% and the UK FTSE 100 has lost 0.27%. S&P 500 futures are down 0.95%, the US 10-year yield is 5.034%, the DXY is 101.77 and gold (XAUUSD) is 4,077.25.

EURUSD | Range 1.1193-1.1256

EURUSD peaked in Asia then slid steadily and is trading at its session low in NY. Risk sentiment has soured on the heels of the sharp equity losses in Asia and weaker European bourses, alongside firm energy prices and French budget angst. EURUSD technicals are bearish below 1.1280, with a move below 1.1180 targeting 1.1110.

GBPUSD | Range 1.3362-1.3419

Sterling is consolidating this week’s gains but has retreated from its overnight peak. Prices are underpinned by yesterday’s UK inflation data, which all but confirmed a November Bank of England hike. GBPUSD is also benefiting from EURGBP selling.

USDJPY | Range 156.77-158.25

USDJPY tumbled to a fresh one-month low thanks to softer US Treasury yields and an equity sell-off sparking safe-haven demand for yen. The Nikkei reported it had learned that the Bank of Japan would leave rates unchanged at 1.25% at its October 30 meeting.

AUDUSD | Range 0.6994-0.7037

AUDUSD dropped on the back of widespread US selling pressure, which overshadowed the hawkish RBA rate outlook. Yesterday, RBA Deputy Governor Andrew Hauser warned that Q3 trimmed mean inflation could run hotter than expected, keeping a hike alive for the November 3 meeting.

USDMXN | Range 18.6535-18.8586

USDMXN is rallying due to souring carry trade sentiment because of the Asian equity rout and Gulf headlines. A Citi survey sees Banxico parked at 6.50% through 2027 when the Fed may still be hiking rates.  

CHINA

PBoC Fix   6.7195 vs exp. 6.6756 (prev. 6.7172)

Shanghai Shenzhen CSI 300 fell 1.84% to 4,036.30

The CSI 300 has now dropped more than 20% from its June peak, officially a bear market, after ten straight losing weeks.

Sources: Investing.com, Newsquawk, Associated Press, FXStreet, investingLive, Tradingpedia, Business Recorder, TradingView