May 4, 2026
USDCAD open: 1.3604, overnight range 1.3579-1.3620, close 1.3591
USDCAD trickled higher in thin markets overnight due to the ongoing tensions in the Middle East and because of Trump’s latest tariff reversal aimed at the EU. The rally extended in early NY trading following reports Iran fired missiles at a US navy ship trying to sail through the Strait of Hormuz. Iran says it was a warning shot.
Bank of Canada Governor Tiff Macklem and Deputy Governor Carolyn rogers are speaking to the Standing Senate Committee on Banking where they will repeat last weeks monetary policy and press conference statements.
WTI oil traded in a 99.21-107.43 range due to increased tensions around Trump’s latest plan to get the Strait of Hormuz fully opened. Iran says not so fast and promised to attack any ships attempting to sail through.
The US and Canadian economic calendars are empty.
USDCAD Technical Outlook
The intraday USDCAD technicals are bullish above 1.3580 but needing a decisive break above 1.3620 to extend gains to 1.3660. Failure to do so, suggests a retest of the 1.3550 area.
The April downtrend line is intact while prices are below 1.3720 which is guarding additional resistance from the 100-day moving average at 1.37955.
For today, USDCAD support is at 1.3580 and 1.3540. Resistance is at 1.3620 and 1.3650. Today’s range: 1.3570-1.3630.
FX Heat Map (6:00 am) one week
FX open high low 6:00 am
Trump Starting an Escort Service
Trump announced Project Freedom on the weekend. It is his plan for the US Navy to escort around 900 ships through the Strait of Hormuz, in what he describes as a “humanitarian gesture.” The Iranian head of unified command Ali Abdollahi said good luck: “We warn that any foreign armed forces, especially the aggressive U.S. Army, will be attacked if they intend to approach and enter the Strait of Hormuz.”
Nervous Start to the Week
Traders were cautious to start the week. The BoJ likely intervened in FX markets even though Japanese markets were closed for a holiday. UK traders also took the day off. It is US employment week and analysts will be looking for clues to Friday’s NFP result from the JOLTS job openings report on Tuesday, ADP employment change Wednesday and weekly jobless claims on Thursday.
The Door is Ajar to Fed Rate Hikes
Cleveland Fed President Beth Hammack and Mineeapolis Fed President Neel Kashkari expressed concnern about elevated inflation which is why they dissented on the FOMC statement. They were all for leaving rates unchanged but wanted to say that the next move could either be up or down. Those views are helping to underpin US Treasury yields.
Taking Stock
Asian equity markets were quiet due to holidays. Australia’s ASX 200 gained 0.37% while Hong Kongs Hang Seng rose 1.24%.
As of 5:30 am PT, the The German DAX is flat and the French CAC 40 is down 0.75%. UK markets are closed. S&P 500 futures are flat, the 10-year Treasury yield is 4.396%, the DXY is 98.33, and gold (XAUUSD) is 4,566.09.
EURUSD | Range: 1.1687-1.1750
EURUSD traded quietly but with a bearish bias. The ongoing closure of the Strait of Hormuz is weighing on prices but so is Trump’s latest move. Trump proved again that any deal a country makes with the US has the shelf-life of an ice cube in a blast furnance. Friday he announced he would raise tariffs on European autos to 25% from 15%.
GBPUSD | Range: 1.3523-1.3607
GBPUSD opened higher in Asia then trickeled lower into the NY opening. The lack of a deal between US and Iran and Iran’s plans to thwart Trump’s Operation Freedom have underpinned oil prices and soured risk sentiment.
USDJPY | Range: 155.73-157.25
The Bank of Japan repeated Friday’s intervention action and got a similar result. USDJPY dropped sharply, then retraced the entire move. Officials are spending a lot of US dollars and not getting much bang for the buck. That’s because Prime Minister Sanae Takaichi’s fiscal stimulus policies and plans hampers the BoJ’s ability to raise interest rates even as the Fed adopts a hawkish bias.
AUDUSD | Range: 0.7168-0.7221
AUDUSD traded defensively as risk sentiment soured over the impasse around the Strait of Hormuz. Japan’s PM met with Australian PM Albanese to “strengthen ties and create a resilient supply network.”
USDMXN | Range: 17.4054-17.5228
USDMXN traded higher due to increased geoplotical tensions, and weak domestic data which raised the odds that Banxico could cut rates by 25 bps to 6.5% this week.
China
USDCNY Fix: Closed for May Day
Shanghai Shenzhen CSI 300 closed for May day 2
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
