March 12, 2026

USDCAD open: 1.3587, overnight range 1.3577-1.3605, close 1.3594

USDCAD traded with a modest bid in a narrow range overnight. USDCAD is supported by concerns about an economy which is already soft, facing further weakness from negative sentiment ahead of the USMCA trade talks which have already started. However, surging oil prices have capped gains in the short term.

WTI rose from 88.89 to 99.53 and is near the top of that band in NY trading. The effective closure of the Strait of Hormuz after a reported six tankers were set ablaze had a bigger short-term impact on prices than the IEA’s release of reserves. That’s because the IEA oil will take up to 7 weeks to reach refiners.

Canada’s trade deficit widened to -$3.6 billion from -$1.3 billion in December with exports falling 4.7% and imports dropping by 1.1%. Motor vehicle exports fell 21.2%.

US weekly jobless claims were 213,000, compared to 214,000 last week. The results were ignored. The US Trade deficit narrowed to $54.5 billion from 72.9 billion in December.

USDCAD Technical Outlook

The intraday USDCAD technicals are modestly bullish in a 1.3520-1.3610 range with prices are threatening the topside. A decisive breach of 1.3620 targets 1.3680, while a move below 1.3570 argues suggests a retest of 1.3510 is likely.

The medium-term technicals remain bearish while trading below 1.3820, which is reinforced by which contains the 200-day moving average at 1.3801 and the 100-day moving average at 1.3819. The broader downtrend that began late last year remains intact while prices remain below that area.

For today, USDCAD support is at 1.3540 and 1.3510. Resistance is at 1.3620 and 1.3660.

Today’s Range: 1.3540-1.3630.

FX Heat Map (6:00 am) one week

FX  open high low 6:00 am

Overnight Round-up

The US and Iran conflict which Trump claimed was “very complete, pretty much,” appears to be “very incomplete, pretty much.” But no one told the IRGC which launched a series of strikes on shipping that have set a reported six tankers ablaze in the Strait of Hormuz. That was in addition to missiles fired at targets in Israel, UAE, and Bahrain.

The International Energy Agency (IEA) announced it would release 400 million barrels of oil from its reserves with the US releasing 172 million barrels of that total. The plan is to ensure sufficient oil is available to limit price increases, fight inflation, and keep consumers from getting mad at their governments. Unfortunately, oil traders see the action as a sign that officials are worried about a prolonged disruption, and they boosted WTI from yesterday’s low of 81.82/b to 91.57/b today.

Trump is far from finished wreaking havoc across global economies. US Trade Rep Greer has begun Section 301 investigations into 16 trading partners, including China, EU, Mexico, and Japan. It is a long process but if successful would allow Trump to slap tariffs on those countries who have policies or actions judged to be “unreasonable, discriminatory, or restrictive” and burden U.S. commerce.

Yesterday’s US inflation numbers met expectations but many of its components showed disturbing increases which reinforced calls for unchanged FOMC policy next week.

Taking Stock

Asian equity markets sank with traders unsettled by rising oil prices. Japan’s Topix fell 1.32%, Australia’s ASX 200 dropped by 1.31%, and Hong Kong’s Hang Seng fell 0.70%.

As of 5:30 am PT, European bourses are in the red. The French CAC 40 has lost 0.61%, the UK FTSE 100 has dropped 0.49% while the German DAX is down 0.40%. S&P 500 futures have dropped 0.60%, the 10-year Treasury yield is 4.228%, and gold (XAUUSD) is 5,170.95.

EURUSD

EURUSD was directionless in a 1.1532–1.1575 range. Price action was determined by equity and oil price movements as the Eurozone economic calendar was empty. The EURUSD technicals are bearish below 1.1690 and looking for a break below 1.1485 to target 1.1380.

GBPUSD

GBPUSD was steady in a 1.3361–1.3416 range and is underpinned by fears that the US and Iran war could shift the Bank of England’s tone to a hawkish bias. UK inflation is already above the BoE target and higher oil prices will exacerbate the problem.

USDJPY

USDJPY rallied from 158.67 to 159.24 then slipped down to 158.81 in NY. The gains were fueled by the rise in oil prices which occurred despite the IEA releasing 400 million barrels of crude from reserves. Traders did not seem to be worried about BoJ intervention to buy yen and sell dollars.

AUDUSD

AUDUSD drifted lower in a 0.7111–0.7161 band because of general US dollar strength, but the downside was limited after Consumer Inflation Expectations rose to 5.2% in March from 5.0% in February, boosting odds for a RBA rate hike next week. AUDUSD is at a level last seen in February 2023.

USDMXN

USDMXN traded in a 17.6412–17.7841 band and is trading in the lower part of that range in early NY. Price action is tracking broad US dollar sentiment; however, favourable interest rate differentials continue to slow USDMXN gains.

China

USDCNY Fix: 6.8959 vs exp. 6.8853 (Prev. 6.8917)

Shanghai Shenzhen CSI 300 fell 0.36% to 4,687.56

China bans fuel exports effective immediately.

US launches another trade probe into China under Section 301 of 1974 trade act. The Americans are looking for policies or actions are judged to be “unreasonable, discriminatory, or restrictive” and burden U.S. commerce. Some examples are: forced technology transfer, market access barriers,  discriminatory regulations.

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview