October 29, 2026

USDCAD open (6:00 am): 1.3995, overnight range 1.3970-1.4002, close 1.3996

USDCAD wasn’t too bothered after the BoC hiked rates by 25 bps to 2.50%, with prices bouncing in a 1.4028-1.4068 range before settling down to pre-hike levels ahead of the FOMC. The Fed left rates unchanged with two dissents, but analysts assessed the policy announcement as dovish, rather than the hawkish outcome expected. The US dollar slid across the board, and USDCAD joined the party.

USDCAD crushed support at the 1.4000 psychologically important level, fuelled in part by a sharp narrowing of CAD/US 2-year and 10-year yield spreads.

Mark Carney is in Montreal to attend the two-day EU-Canada summit. Hopes of Canada being declared an “associate member,” an idea floated by EU Commission President Ursula von der Leyen, were kiboshed when Germany, France and others objected. Increasing trade with the EU is a terrific idea, but even if Canada doubled its exports, it would only be a rounding error compared to Canada’s US trade.

WTI oil chopped about with a somewhat bearish bias in a $100.60-$102.30 range. News that various mediators in the US/Iran dispute have increased efforts to obtain an agreement, fearing a massive US attack after the midterms, weighed on prices. VP Vance has reportedly reached out to Iran’s Mohsen Rezaei, secretary of the Supreme National Security Council.

There are no Canadian economic reports today.

USDCAD Technical Outlook

The intraday USDCAD technicals have turned bearish while trading below 1.4020, the 4-hour mid-Bollinger Band, after yesterday’s rejection at 1.4069 triggered a slide to the 1.3950 area. The 4-hour MACD has crossed back below its signal line and the zero line, wiping out the early-week recovery. A drop below 1.3950 targets 1.3930. A recovery above 1.4020 will shift the focus back to 1.4050.

Longer term, yesterday’s close at 1.3993 reversed Tuesday’s breakout and left USDCAD back below the 100-day moving average at 1.4047. It also put the pair right on the 38.2% Fibonacci retracement of the January to October rally at 1.3992, and that support has been broken, intraday.

The key level on the downside is the 61.8% Fibonacci retracement of the August to October rally at 1.3946, which held yesterday. A daily close below it would put the 200-day moving average at 1.3887 and the 50% Fibonacci level of the January to October rally at 1.3898 in play. On the upside, USDCAD needs a daily close above the 100-day moving average at 1.4047 to revive the recovery and open 1.4081.

For today, USDCAD support is 1.3950 and 1.3930. Resistance is 1.4020 and 1.4050

FX Heat Map

FX open high low 6:00 am

Upside Surprise for US Growth

The FOMC statement upgraded growth from “a solid pace” to a “strong pace,” and today’s GDP results justified the view. Q3 GDP rose 3.4% y/y (forecast 3.2% and previously 2.2%).

September Core PCE rose 0.3% as expected and 3.1% y/y compared to 3.0% in August.

Weekly jobless claims was a non event rising 194,000 which was close to unchanged.

FOMC Meeting Deemed Dovish

The Fed kept the funds rate at 3.75%-4.00% on a 10-2 vote, with Hammack and Cook preferring another quarter point. The result was not surprising, as a rate hike ahead of Tuesday’s mid-term elections would have provoked the wrath of Trump.

The statement still flags inflation as elevated and keeps further hikes on the menu, yet the press conference contained nothing scarier than what was already priced, and short-end yields eased.

Taking Stock

Asian equity indexes closed mixed. Hong Kong’s Hang Seng fell 0.59%, Australia’s ASX 200 rose 0.50% and Japan’s Topix gained 0.29%.

As of 5:40 am PT, European bourses are higher, with the German DAX and French CAC-40 up 0.93%, while the UK FTSE 100 has risen 0.44%. S&P 500 futures are down 0.36%, the US dollar index is 102.17, the US 10-year yield is at 5.003% and gold (XAUUSD) is at $4,024.92.

EURUSD | Range 1.1125-1.1161

EURUSD has drifted lower to 1.1131 as the dollar firmed through the European morning, with French debt worries still lurking in the background. The ECB is expected to hold at 2.50% at 9:15 am ET, and Lagarde’s balance between sticky inflation and limp growth will steer the next move. EURUSD chopped around in the wake of October sentiment surveys, with consumer confidence unchanged, as expected, at -17.9, while economic sentiment ticked lower to 96.7 from 97.9.

GBPUSD | Range 1.3296-1.3337

Cable is consolidating yesterday’s post-FOMC gains but is down from its session peak in early NY trading. Traders are feeling some relief after Chancellor John Healey didn’t deliver any surprises in his budget tabled yesterday. The focus is now on next week’s November 5 BoE meeting.

USDJPY | Range 157.61-158.07

USDJPY is hanging on to this week’s gains despite the dollar weakness following the FOMC decision. The BoJ wraps up its meeting tomorrow and is expected to stand pat.

AUDUSD | Range 0.7030-0.7068

Aussie is testing the floor of the uptrend channel (0.7030-0.7080) that began on October 19. Yesterday’s hotter-than-expected inflation data and comments by RBA Governor Bullock that inflation is too high pretty much guarantee a rate hike on November 3.

USDMXN | Range 18.6195-18.7433

USDMXN is flirting with its session peak driven primarily by a shrinking interest rate spread between the Federal Reserve and Banxico that has severely eroded the peso’s carry-trade appeal.

CHINA

PBoC Fix   6.7147 vs exp. 6.6596 (prev. 6.7165))

Shanghai Shenzhen CSI 300 fell 1.03% to 4,041.84

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