May 1, 2026

USDCAD open: 1.3575, overnight range 1.3550-1.3588, close 1.3580

USDCAD dropped yesterday due to broad-based US dollar selling pressures and surging crude prices didn’t hurt. The sharp gains in the S&P 500 in April forced portfolio managers to sell US dollars to rebalance their portfolios. Those flows tend to be chunky and concentrated around the 11:00 am fixing time. USDCAD drifted lower in NY trading and is testing the first layer of support as a prolonged Iran war fears underpin oil prices.

“May Day” holidays closed most European markets and suggest North American FX volumes will be lighter than normal.

USDCAD is getting a bit of a lift after Bank of Canada Governor Tiff Macklem opened the door to rate hikes this year. The odds of a 25 bp hike in September are 89%.

WTI oil is trading at 105.76, just above the session low of 105.25 .The overnight range was 104.15-106.62. Trump maintains that he wants a deal with Iran, but Iran can’t have nukes. Trump needs to make a case to Congress today or end the war. That’s unlikely as rules do not apply to him.

Today’s data includes US ISM Manufacturing PMI (forecast 53, previous 52.7).

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish below 1.3630, with the break below 1.3600 on the 4-hour chart setting the stage for a robust challenge of support in the 1.3530-1.3550 zone. However, the 4-hour RSI is deeply oversold suggesting a minor bounce is possible.

The longer-term USDCAD technicals are bearish below 1.3700 with the decisive 4-hour break below 1.3600 opening the door to a test of the lower Bollinger Band at 1.3492. The daily RSI suggests that USDCAD is becoming oversold.

For today, USDCAD support is at 1.3550 and 1.3510. Resistance is at 1.3610 and 1.3630. Today’s range: 1.3550-1.3630.

FX Heat Map (6:00 am) one week

FX  open high low 6:00 am

Earnings Trump Bombs

Trump’s bungling of his Iran war which fuelled an 83% spike in WTI, year-to-date has given equity traders fits and starts since March 1, but robust Q1 earnings from Big Tech has been a soothing elixir. The S&P 500 and NASDAQ are making record highs and the Dow Jones Industrial Average is close, which continues to stoke positive risk sentiment.

The US dollar traded narrowly and mixed overnight but is poised to end the week with deep losses across the board.

Taking Stock

In Asia, Japan’s Topix finished flat while the other major indexes were closed for May Day holidays.

As of 5:35 am Pt,  the UK FTSE 100 is down 0.53% while the German DAX and French CAC 40 are closed for May Day. S&P 500 futures are up 0.30%, the 10-year Treasury yield is 4.371%, the DXY is 97.85, and gold (XAUUSD) is 4,597.31.

EURUSD | Range: 1.1719-1.1769

EURUSD drifted higher in an uneventful session as most European traders had the day off. Yesterday the ECB left rates unchanged which was expected and it did not say anything to dissuade traders from leaving the odds of a June rate hike at 90%. EURUSD topside may be limited if oil prices continue to rise.

GBPUSD | Range: 1.3487-1.3544

GBPUSD rallied yesterday and then consolidated the gains in a holiday-thinned market. The Bank of England left rates unchanged at 3.75%. Chief Economist Huw Pill was the only dissenter and he wanted a 25 bp hike. Governor Bailey stressed the need for caution due to the inflation uncertainties and the risk of a steep economic downturn. UK Manufacturing PMI ticked up to 53.7 in April from 53.6, which was partly due to manufacturers front-loading purchases.

USDJPY | Range: 155.50-157.33

USDJPY plunged after the Bank of Japan took advantage of thinner-than-usual May Day markets and intervened to inject some two-way risk into trading. The actual intervention follows a series of verbal warnings from authorities about speculative trading. But the intervention doesn’t address the core issue for the yen which is US/Japan interest rate differentials which support the US dollar and surging oil prices which are a huge negative for Japan’s economy. Tokyo inflation numbers were a touch softer than expected while Manufacturing PMI rose to 55.1 from 54.9.

AUDUSD | Range: 0.7184-0.7209

AUDUSD ticked higher overnight due to broad US dollar weakness, firm commodity prices and expectations for a RBA rate hike on Tuesday. Australia Producer prices were 3.0% y/y compared to 3.5% last month.

USDMXN | Range: 17.4164-17.4869

USDMXN traded quietly overnight and Mexican markets are closed today. The USDMXN technicals are bearish while prices are below 18.0000 and it needs to decisively break below 1.170000 to extend gains. Failure suggests a retest of 18.6650.

China

USDCNY Fix:  Closed for May Day

Shanghai Shenzhen CSI 300 closed for May day

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