May 26, 2025
USDCAD: open 1.3720, overnight range 1.3687-1.3740 close 1.3735,
USDCAD plunged Friday, blowing through support and triggering stop losses. The drop continued overnight reaching 1.3687, a level last seen on October 9, 2024. The losses were exacerbated by the narrowing of CAD/US 10-year interest yield spreads to -121.2 today from -130.9 last Monday.
The King is coming to Canada (no, not Trump—he thinks he is an emperor) to open Parliament on Tuesday. The visit is to make Trump aware that Canada cannot be the 51st state as it is still a colony of Britain.
Oil prices are steady with WTI bouncing in a 61.34-62.15. Traders are cautious ahead of next week’s Opec meeting that includes discussions about a production increase.
There are no Canadian economic reports today and US markets are closed for Memorial Day.
USDCAD Technicals
The intraday USDCAD technicals are bearish with the decisive break below the 1.3770-1.3805 support zones reverting to resistance and suggesting further losses toward 1.3500. However, momentum indicators suggest USDCAD is at extreme oversold levels.
The medium term technicals are bearish and are looking for a test of the 1.3575 area then 1.3500. Only a move above 1.4020 would negate the trend.
For today, USDCAD support is at 1.3680 and 1.3640. Resistance is at 1.3740 and 1.3790
Today’s Range: 1.3680-1.3780
Chart: USDCAD daily
FX at a Glance
Tariffs and Geopolitics
Global markets continue to dance to Trump’s tune—“Tariffs, Sanctions America Great, Oh My” and that remains the case today. The President called Putin “Crazy” after Russia launched its largest attack on Kyiv, while scolding Ukraine President Zelenskyy for complaining about Russia’s actions.
Trump tweeted about how respectful EU President Ursula Von der Leyden was when she called to request a tariff extension from June 1 to July 9 and said “it was my privilege to do so.” (Stroke me, stroke me). Japanese Prime Minister Shigeru Ishiba said he wanted a tariff deal before the G-7 meeting in Kananaskis, Alberta.
Equities Take Flight
Asian equity traders shrugged off Wall Street’s weak close on Friday and they finished Monday with mixed to higher, except for Chinese indices. Japan’s Topix gained 0.60% while Australia’s ASX 200 closed flat.
European bourses are in the green as traders were emboldened by Trump’s tariff extension. The German Dax has risen 1.54% while the French CAC 40 index is up 1.08%. The 10-year Treasury yield inched up to 4.537%. Gold (XAUUSD) fell 24 to 3334.00
EURUSD
NY Open: 1.1380, Overnight Range: 1.1363-1.1419
EURUSD soared in Asia then gave back most of those gains in Europe. The currency rallied after Trump agreed to extend his 50% EU tariff from June 1 to July 9.
GBPUSD
NY Open: 1.3499, Overnight Range: 1.3414-1.3502
GBPUSD continued its two-week rally overnight. Prices are supported by a broadly weak US dollar and improved tariff risk sentiment after Trump extended EU tariffs to July 9. UK policymakers were feeling smug over their “close relationship” with the US which helped them avoid the worst of Trump’s tariff rants, but that may be changing after Trump complained about taxes on UK North Sea oil drilling. But not today.
USDJPY
NY Open: 142.86, Overnight Range: 142.23-143.08
USDJPY declined further on renewed US dollar selling pressure after Trump agreed to extend the start of 50% EU tariffs and increased odds for a tariff deal between the US and Japan with talk of a resolution during the June 15-17 G-7 Summit meeting.
AUDUSD
NY Open: 0.6504, Overnight Range: 0.6486-0.6538
AUDUSD made a new 2025 high before retreating to the middle of its overnight range. AUDUSD gains are being fueled by generally bearish US dollar sentiment, and hopes for a China-US tariff agreement.
NZDUSD
NY Open: 0.6014, Overnight Range: 0.5982-0.6032
NZDUSD continues to benefit from last week’s better-than-expected retail sales data. In addition, ongoing bearish US dollar sentiment due to the impact of tariffs on the US economy and ongoing budget discussions.
USDMXN
NY Open: 19.2195, Overnight Range: 19.1916-19.2613
USDMXN extended last week’s losses and dropped to its session low in Asia before recouping some losses in Europe. The currency pair is dropping in concert with broad US dollar weakness as global investors shun the greenback.
China Snapshot`
PBoC fix: 7.1833 (Prev. 7.1919).
Shanghai Shenzhen 300 fell 0.57% to 3860.11
Goldman Sachs analysts expect USDCNY to slide to 7.10 then 7.00 in 2025.
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
