April 20, 2026

USDCAD open: 1.3692 overnight range 1.3681-1.3710, close 1.3694

USDCAD continues to consolidate recent losses as FX traders shrug off the latest drama from the Middle East.  Iran says the Strait of Hormuz is closed and the US has seized an Iranian ship. Traders do not seem to be overly concerned.

Prime Minister Mark Carney, emboldened by having a majority government, warned Canadian’s that Canada’s relationship with the US, once a strength, is now a weakness.

Elsewhere, Canada’s former trade negotiator Steve Verhul said about trade negotiations, “Time was on Canada’s side” because of political pressure on Trump. US Commerce Secretary Howard Lutnik said “That is, like, the worst strategy I’ve ever heard. They suck.” Lutnik’s words should be heeded because his sycophantic support of Trump shows  he knows “all about sucking.

WTI oil surged 5.79% from Friday, rising from a low of 79.34 to 89.55 this morning on the news of renewed hostilities in the Middle East and the closure of the Strait of Hormuz. Prices have eased to 87.23 in NY.

Canada CPI rose 2.4% y/y in March (forecast 2.5% y/y, February 1.8%) with higher energy prices fueling the rise.  CPI, ex-energy rose 2.2%, lower than the 2.4% in February. BoC policymakers will not be bothered by the result as inflation is within the target band of 1-3%.  The Bank of Canada Business Outlook Survey is later today.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish below 1.3730 and looking for a break below 1.3650 to target 1.3605. A move above 1.3730 opens the door to 1.3770. Momentum indicators are neutral.  

The medium-term USDCAD outlook is bearish below 1.3760. The pair has also rolled over below the middle Bollinger Band and is now pressing toward the lower band at 1.3590. Daily RSI is near 15, which is deeply oversold, suggesting downside may be stretched and vulnerable to a corrective bounce, but not yet reversing the trend. A break below 1.3605 targets 1.3520, while rebounds should struggle ahead of 1.3815.

For today, USDCAD support is at 1.3650 and 1.3605. Resistance is at 1.3710 and 1.3730.
Todays range 1.3640-1.3730

FX Heat Map (6:00 am) one week

FX  open high low 6:00 am

Talk that Talk

Trump breached his own cease-fire by blockading Iran and then seizing an Iranian cargo ship. Iran fired on a ship and announced the Strait of Hormuz was closed. Even so, Trump said he is sending envoys to Islamabad for further peace talks with Iran but Iran said it has no plans to send negotiators.

The outlook for US interest rates is closely tied to consumer expectations and the duration of the conflict. Christopher Waller, a one-time favourite to be Trump’s Fed chair nominee, delivered somewhat hawkish comments on Friday. He warned that a weak labour market and higher inflation would force him to call for holding rates steady.

Trump is also facing another defeat. Fed Chair nominee Kevin Warsh’s nomination hearing is tomorrow, and Rep. Thom Tillis said he would block the nomination until the Justice Department probe into Powell and the Fed is completed.

FX traders stayed on the sidelines, and the US dollar opened little changed in NY today.

Taking Stock

Asian equities closed with gains. Japan’s Topix rose 0.43%, Hong Kong’s Hang Seng gained 0.77%, while Australia’s ASX 200 closed flat.

As of 5:30 am PT,  European bourses are underwater. The German DAX is down 1.34%, the French CAC 40 has lost 1.08%, and the UK FTSE 100 has dropped 0.61%. S&P 500 futures are down 0.44%, the 10-year Treasury yield is 4.261%, the DXY is 98.28, and gold (XAUUSD) is 4,804.67.

EURUSD

EURUSD traded in a 1.1729–1.1772 range, gapping down at the Asia open then rising steadily into the NY open, albeit in thin trading. ECB Governor Alexander Damarco said that the ECB would be better off to wait before raising rates. But he also said that the market pricing of two rate hikes this year was not unreasonable. German producer prices fell -0.2% m/m in March, but the data was ignored. Brent crude prices surged 8%, which helped to limit gains.

GBPUSD

GBPUSD dropped then popped in a 1.3476–1.3519 range and is near the top of the band in NY trading. The initial sell-off was due to Middle East news and exacerbated by ongoing UK political drama. The UK Rightmove House Price Index rose 0.8% in April, unchanged from March.

USDJPY

USDJPY traded in a 158.73–159.20 range, with the low seen at the Asia open. The gains were fuelled by rebounding oil prices and lowered expectations for a BoJ rate hike in the near term. Japanese traders may also be distracted by news of a 7.4 magnitude earthquake off the northern coast.

AUDUSD

AUDUSD is trading near the top of its 0.7117–0.7176 range. Traders have faded the renewed Middle East drama, and the currency is underpinned by the RBA’s hawkish outlook.

USDMXN

USDMXN is in the middle of its 17.3075–17.4095 range. Prices are tracking broad US sentiment due to geopolitical tensions, but the wide Mexico and US interest rate differentials act as a brake on US dollar gains.

China

USDCNY Fix:  6.8648 vs exp. 6.8291 (Prev. 6.8622)

Shanghai Shenzhen CSI 300 rose 0.61% to 4,757.44

PBoC leaves 1 and 3 year Loan Prime Rate (LPR) unchanged at 3.00% and 3.50%, respectively.

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