November 5, 2026

USDCAD open (6:00 am): 1.3957, overnight range 1.3943-1.3983, close 1.3979

USDCAD traded sideways and uneventfully as global markets continued to digest and assess the impact of the US mid-term elections.

The Federal government unveils the budget for the next fiscal year today. Most of the major initiatives have been announced already. They included extending the tax cuts one of the many taxes imbedded in a litre of gas, and the highly touted productivity mega deduction for business write-offs.  As usual, it will also contain plenty of forecasts and fiscal targets, most of which will prove meaningless.

WTI is climbing from its Asian low of $86.66 to $88.86 as traders bet that there is an off-ramp from the Iran war following the midterm elections.  However, reports of two tankers and a tug are ablaze in the Strait of Hormuz and put a floor under barrels reminded markets that the hostilities are far from resolved. Furthermore, reported 2 of the 3 Russian oil tankers have been diverted, suggesting concern about how a Democrat congress will react to the sanctioned vessels in US waters.

There is no Canadian data of note today. The US data includes weekly jobless claims  which if they come in as forecast at 194,000, will be a non-event.

USDCAD Technical Outlook

The intraday USDCAD technicals are neutral, with prices stuck in a 1.3930-1.4020 range for a third day. Yesterday’s dip to 1.3929 briefly broke the 1.3940 support but failed to attract follow-through selling, and USDCAD closed 50 pips off the low at 1.3979. Overnight, the pair has traded in a narrower 1.3943-1.3981 band. Momentum indicators give no clear direction. A break below 1.3930 targets 1.3900. A recovery above 1.4020 targets the 100-day moving average at 1.4044.

Longer term, the technicals are unchanged. USDCAD is in a downtrend, confirmed by the breaks below 1.4130 and then 1.4000, and it remains below the 100-day moving average at 1.4044. A decisive break below 1.3940 targets the April uptrend line, which comes into play at 1.3850 and is guarded by the daily lower Bollinger Band at 1.3925 and the 200-day moving average at 1.3896.

For today, USDCAD support is 1.3930 and 1.3900. Resistance is 1.3990 and 1.4020.

FX Heat Map

FX open high low 6:00 am

Greed and Gridlock is Good

Wall Street likes the new Congress, and it rallied hard yesterday, led by a 3.03% rally in the Dow Jones Industrial Average, with the S&P and NASDAQ gaining around 1.50%.

A Democratic Congress means slimmer deficit bets and pressure on the White House to wind down the Iran war. Traders may be able to shift their focus from White House drama to the more mundane economic data and how it impacts interest rates.

Taking Stock

Asian equity indexes followed Wall Street’s lead and rallied. The Hong Kong Hang Seng soared 3.67%, while Australia’s ASX 200 rose 2.61% and Japan’s Topix gained 1.16%.

As of 5:40 am PT, European bourses are higher. The German DAX has climbed 0.68%, the UK FTSE 100 is up 0.74% and the French CAC 40 has gained 0.68%.  S&P 500 futures have gave back earlier gains and are flat. The US 10-year Treasury yield sits at 4.90%, the DXY is 101.63 and gold (XAUUSD) is at $4,121.78.

EURUSD | Range 1.1213-1.1269

The euro has handed back its early gains and sits flat near the bottom of its range. Eurozone PPI rose 11.1% y/y (forecast 10.7%) in September and 2.5% m/m, as expected. Former Dutch Central Bank Chief Klaas Knot is Holland’s choice to replace Christine Lagarde as President of the ECB in February.

GBPUSD | Range 1.3448-1.3501

The Bank of England hiked its benchmark rate by 25 bps to 4.0% in an 8-1 decision, surprising no one. One policymaker wanted a 50 bp hike due to fears that inflation will accelerate to 5.0% in 2027, blaming the Iran war (Trump?) for the problem. GBPUSD popped then dropped during Baileys press conference.

USDJPY | Range 157.79-158.50

USDJPY dropped to its low in Asia, then rebounded to the peak in early NY due to a profit-taking US dollar rally. Congress may be Democratic, but the Fed is still hawkish. The September BoJ minutes suggested a bias to faster tightening, and December may see a rate hike.

AUDUSD | Range 0.6998-0.7025

AUDUSD is consolidating yesterday’s gains. Prices are underpinned by a widening trade surplus ($2.83 billion, forecast $1.2 billion and $184 million in August).

USDMXN | Range 18.5408-18.6354

USDMXN is trading defensively after dropping sharply yesterday. Traders expect Banxico will leave its benchmark rate unchanged at 6.5% today.

CHINA

PBoC Fix   6.7156 vs exp. 6.6783 (prev. 6.7180)

Shanghai Shenzhen CSI 300 rose 0.29% to 4,113.41

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