May 7, 2026

USDCAD open: 1.3628, overnight range 1.3623-1.3644, close 1.3635

Improved global risk sentiment drove the US dollar modestly lower overnight, but the Canadian dollar was the “Johnny-come-lately.”  USDCAD has trickled higher since the NY open as oil prices ease. Iran is reviewing the latest US peace proposal and is expected to respond today.

Trump’s approval of the Keystone Light pipeline and expectations that Carney’s government will announce measures to speed up energy projects are not translating into Canadian dollar support because at the moment those projects are pipe dreams, literally. Cenovus CEO agrees saying Canada’s focus on climate has made developing Canada’s recourses uncompetitive with the rest of the year.

WTI oil traded defensively in a 91.98-96.47 range overnight and dropped to 89.88 in NY. Traders are unwilling to get too invested in Iran peace talk hopes but can’t help themselves.

US Challenger job cuts data reports cuts rose by 38%, to 83,687 in April.

US weekly jobless claims are rose 200,000 last week (forecast 205,000, previous 189,000). The results continue to demonstrate the resilience of the employment market.

There are no Canadian data releases today.

USDCAD Technical Outlook

The intraday technicals are bearish below 1.3640, with further resistance seen at 1.3660. The downside target is 1.3580 then 1.3550. on any weakness. A push back through 1.3640is needed to relieve downside pressure and open a run at 1.3680.

The longer-term technicals are bearish below the 100 day moving average at 1.3724 acting as a long-term ceiling. Daily RSI at 43 is softening and MACD is bearish. The 1.3535-1.3580 band is the last meaningful support shelf before the structure opens up to the downside.

For today, USDCAD support is at 1.3580 and 1.3540. Resistance is at 1.3640 and 1.3670. Today’s range: 1.3580-1.3640.

FX Heat Map (6:00 am) one week

FX  open high low 6:00 am

Iran Response Expected Today

Iran is reviewing a US proposal to end hostilities but key issues remain unresolved. Iran is expected to announce a decision today which has given a boost to risk sentiment. Reuters reports that Trump was forced to cancel Operation Freedom because Saudi Arabia barred the US military from using Prince Sultan Airbase and Saudi airspace. The Saudis were irked at not being consulted and called it an escalation which could put Saudi territory into Iran’s crosshairs.

Taking Stock

Asian traders were in an optimistic mood on hopes for an end to Trump’s war in Iran. Japan’s Topix soared 3.0%, Hong Kong’s Hang Seng rose 1.57% and Australia’s ASX 200 gained 0.96%.

As of 5:40 am PT, European bourses are trading mixed. The UK FTSE 100 is down 0.58% while the German DAX and French CAC 40 are flat.  S&P 500 futures are up 0.16%, the10-year Treasury yield is 4.314%, the DXY is 97.72, and gold (XAUUSD) is 4,749.61.

EURUSD | Range: 1.1745-1.1778

EURUSD is close to re-testing yesterday’s peak on a fresh wave of optimism about the Iran war ending, which sparked broad-based US dollar selling. Traders shrugged off the March Retail Sales data (actual -0.1%, forecast -0.3%, February -0.3%) because it is too stale. The EURUSD technicals are bullish above 1.1740, looking for a decisive move above 1.1810 to extend gains to 1.1860.

GBPUSD | Range: 1.3590-1.3630

GBPUSD shrugged off weaker than expected Construction PMI (actual 39.7, forecast 45.7, March 45.6) and rallied on optimism around an end to the Iran war. UK voters are at the polls for a series of local and regional elections with around 5,000 council seats up for grabs. Pundits argue that if Starmer’s party loses blocks of council seats, he will be under pressure to quit. This is the same guy who won a landslide victory less than two years ago.

USDJPY | Range: 156.02-156.53

USDJPY was a sea of calm. There didn’t appear to be any intervention today. Nikkei news reports that the BoJ spent around $28.8 billion intervening in the past week. The BoJ minutes reveal a hawkish bias due to inflation pressures from the Iran war.

AUDUSD | Range: 0.7231-0.7265

AUDUSD is clawing back yesterday’s losses on fresh risk-on sentiment, despite posting its first trade deficit in eight years (actual -A$1.90 billion, forecast A$4.25 billion, February A$5.03 billion).

USDMXN | Range: 17.1966-17.2625

USDMXN consolidated yesterday’s losses with traders looking ahead to the April inflation numbers. Core CPI is expected to rise 0.31% m/m compared to 0.38% previously, while the headline number is expected to fall from 0.85% to 0.25% m/m.

China

USDCNY Fix:  6.8487 (previous 6.8562)

Shanghai Shenzhen CSI 300 rose 0.48% to 4,900.51

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