May 28, 2025

USDCAD: open 1.3825, overnight range 1.3802-1.3839, close 1.3813

USDCAD rallied yesterday after US Consumer Confidence and Durable Goods Orders, -ex transportation suggested that the American economy was more resilient than expected in the face of Trump’s tariffs.  It is still early days and front-loaded pre-tariff imports mean the pain will soon be felt.

Meanwhile, the lack of actionable US or Canadian data today and the wait for the likely useless FOMC report points to further range trading.

WTI oil traded in a 60.85-61.60 range with traders on hold until the details of the upcoming Opec meeting, which is today, are released. A production cut of 411,000 b/day starting July 1 is expected. Reuters is reporting that Saudi Arabia may trim the price of Arab Light crude for Asian buyers by 0.40-0.50 cents per barrel

USDCAD Technicals

The intraday USDCAD technicals are bullish but the rally is merely a correction in an oversold market. A break above 1.3840 targets 1.3890. If the topside holds, a retest of support at 1.3760 is likely.

The medium term technicals are bearish while USDCAD is below 1.4020 (200 day moving average) a level which is being guarded by resistance at 1.3920

For today, USDCAD support is at 1.3805 and 1.3780. Resistance is at 1.3840 and 1.3890
Today’s Range: 1.3805-1.3890

Chart: USDCAD 4 hour

FX at a Glance

Lots of Noise-No Direction

There is no shortage of Trump news—from tweets about taking Fannie Mae and Freddie Mac public to rants about “usurping the power of the Presidency”—which one assumes, he tweeted with a straight face. Trump is so bothered by losing an election to Joe Biden that he continues to bad-mouth him.
Trump’s chaotic policy shifts have given rise to what Financial Times journalist Rob Armstrong described as the TACO Trade (Trump Always Chickens Out). The gist of the strategy is that Trump makes outrageous threats and then always backs off, which means fade the reaction.

Global Equities Retreat
Wall Street closed with hefty gains yesterday, buoyed by May Conference Board Consumer Confidence data jumping 12.3 points to 98.0 mainly due to the downgrading of US and China tariffs.
Asian traders were not impressed, perhaps due to caution ahead of the Nvidia (NVDA: Nasdaq) earnings report today. Australia’s ASX 200 ticked down by 0.13%, Hong Kong’s Hang Seng lost 0.53% and Japan’s Topix was flat.
European bourses are also underwater. The German DAX is down 0.46% and the UK FTSE 100 index is down 0.06%. S&P 500 Futures are slightly positive with a 0.09% rise which is merely a rounding error after yesterday’s 2.05% rally. The US 10-year Treasury yield drifted in a 4.644–4.48% range and gold (XAUUSD) is up 12.85

EURUSD
NY Open: 1.1333, Overnight Range: 1.1296–1.1345
EURUSD is struggling and has been on the defensive since peaking at 1.1419 after Trump backed off his 50% tariff threat on EU imports. There wasn’t much Euro area data on tap today and what was available was overshadowed by ongoing trade talks. Traders have largely dismissed ECB President Christine Lagarde’s comments about positioning the euro as a reserve currency due to massive political complications.

GBPUSD
NY Open: 1.3509, Overnight Range: 1.3461–1.3523
GBPUSD is consolidating this week’s gains and the uptrend line from May 12 remains intact. The currency pair is getting some support from speculation that the Bank of England’s rate cuts may be shallower than anticipated.

USDJPY
NY Open: 144.23, Overnight Range: 143.85–144.77
USDJPY rallied hard yesterday then consolidated the gains in a choppy overnight session. Reaction to another disappointing Japanese long bond auction was offset by optimism around hopes of some sort of tariff accommodation with the US being announced at the G-7 meeting on June 15–17.

AUDUSD
NY Open: 0.6443, Overnight Range: 0.6426–0.6454
AUDUSD opened nearly unchanged from yesterday after a quiet overnight session. Prices touched a new 2025 high on Monday and have retreated since as traders await fresh input. Today’s FOMC minutes are unlikely to satisfy that demand.

NZDUSD
NY Open: 0.5969, Overnight Range: 0.5924–0.5980
NZDUSD rallied after the RBNZ cut its OCR rate by 25 bps to 3.25% in a classic case of sell the rumour, buy the fact. The decision was not unanimous as one voter opted to leave rates unchanged pending further clarity around this year’s inflation spike. The statement also indicated one or two more rate cuts were in the cards.

USDMXN
NY Open: 19.2794, Overnight Range: 19.2591–19.3096
USDMXN recouped yesterday’s losses and rallied mainly due to broad-based US dollar strength amidst mixed to soft Mexican economic data. Prime Minister Claudia Sheinbaum was invited to the G-7 meeting in Kananaskis, Alberta by Canadian Prime Minister Mark Carney, which raised hopes for a US–Canada–Mexico meeting.

China Snapshot`

PBoC fix:  7.1894 vs exp. 7.1996 (Prev. 7.1876).

Shanghai Shenzhen 300 fell 0.08% to 3836.24

FX high, low, open (as of 6:00 am ET)

Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.

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