May 26, 2026
USDCAD open: 1.3801, Mon-Tues. range 1.3795-1.3823. Fri. close 1.3821-Mon. close 1.3802
USDCAD remains rangebound and tied constantly shifting US dollar sentiment around developments in Trumps war with Iran. Weekend chatter of an imminent deal fueled a bit of a risk on rally Monday but that quickly soured after the US announced it made “self-defence” strikes on Iranian targets.
The reality is that regardless of the propaganda spewing from the White House, the Strait of Hormuz is effectively closed, Iran still has a stockpile of enriched uranium and the global economy is under stress. Friday’s Michigan Consumer Sentiment index was 44.8, a new all time low due to increased anxiety over inflation.
WTI oil prices spent last week drifting lower in anticipation of a more-lasting US and Iran ceasefire and hit 89.33 on Monday. Renewed US/Iran hostilities lifted prices to 93.60 but they have since eased. Some analysts are suggesting that oil prices (Brent) could remain above $100/barrel for prolonged period due to the sheer scale of the supply crunch.
Today’s US data includes Consumer Confidence, and Case-Shiller Home Prices. There is no data from Canada.
USDCAD Technical Outlook
The intraday technicals are directionless inside a narrow 1.3790-1.3840 range with tests of both sides of the band surviving. A break below 1.3790 targets 1.3760, while a move above 1.3820 suggests a test of 1.3850.
The daily technicals are bullish above the 100-day moving average at 1.3785 and targeting the channel top at 1.3880. The daily RSI is elevated but remains below the extreme overbought threshold of 85.
For today, USDCAD support is at 1.3790 and 1.3760. Resistance is at 1.3820 and 1.3850. Today’s range: 1.3770-1.3840.
FX Heat FX open high low 6:00 am
FX open high low 6:00 am
Tepid Start after UK/US markets reopen
British and American traders enjoyed long weekends and when 75% of the global market liquidity goes on holiday, the balance just twiddles their thumbs.
FX markets swung sharply between Monday’s optimism and Tuesday’s renewed caution as traders reacted to rapidly shifting US-Iran headlines. Monday saw a broad risk-on rally after reports suggested Washington and Tehran were close to a ceasefire and Hormuz reopening deal. Oil plunged nearly 7%, dragging the USD lower, boosting EUR/USD and GBP/USD, while USD/JPY slipped as lower crude eased pressure on Japan. Equities rallied globally, led by the Nikkei hitting record highs.
By Tuesday, sentiment cooled after US “self-defence” strikes targeted Iranian missile sites and mining vessels near Hormuz. Crude rebounded off lows, and the greenback inched higher. Despite the flare-up, markets still viewed diplomacy as alive, limiting safe-haven demand and preventing a deeper oil rebound.
Russia warned the US to evacuate its embassy in Kyiv and told foreigners to leave, ahead of “systemic strikes” aimed at “decision making and command centers.”
Taking Stock
Asian equities indexes gave back some of Monday’s gains after the US bombed Iran again. Japan’s Topix fell 0.10%, Australia’s ASX 200 dropped 0.39% and Hong Kong’s Hang Seng closed flat.
As of 5:20 am PT the German DAX is down 0.49%, the French CAC 40 has lost 0.76% while the UK FTSE 100 has climbed 0.51%. S&P 500 futures are up 0.68%, the 10-year Treasury yield is 4.486%, DXY is 99.10 and gold (XAUUSD) is 4,511.58
EURUSD | Range (Monday-Tuesday): 1.1606–1.1656
EURUSD gapped higher at Monday’s open on improved risk sentiment then traded sideways overnight. EURUSD is hanging on to hopes for an Iran/US deal. They are downplaying escalation risks even though the US attacked Iran again, in the belief that the action is merely another chapter in the Art of the Deal as the Americans attempt to regain some negotiating leverage. EURUSD is also underpinned after ECB policymaker Isabel Schnabel called for a June rate hike.
GBPUSD | Range: 1.3432-1.3511
GBPUSD gapped higher in Asia on Monday then drifted lower from the peak throughout todays session. Support is due to hopes that Iran and the US reach a peace agreement, but gains are capped by weak domestic data.
USDJPY | Range: 158.75-159.24
USD/JPY traded sideways with a slight bullish bias on Tuesday after new US “self-defence” strikes lifted oil prices and halted a slide in 10-year US Treasury yields. However gains remain capped by a combination of intervention fears and reduced expectations for a Bank of Japan (BOJ) rate hike following last week’s soft domestic inflation data.
AUDUSD | Range: 0.7127-0.7182
AUDUSD consolidated Monday’s “risk-on” gains overnight with price action contained ahead of tomorrow’s Australian inflation data and increased stagflation risks.
USDMXN | Range: 17.2431-17.3475
USDMXN traded choppily and is in the middle of its range since Friday. Banxico’s decision to pause easing rates supported by modestly lower inflation numbers and news of record foreign direct investment in Q1 2026 have helped cap USDMXN gains.
CHINA
- USDCNY Fix: Monday: 6.8318 (previous 6.8373) Today: 6.8288 vs exp. 6.7822 (prev. 6.8318).
- Shanghai Shenzhen CSI 300 (Monday) rose 1.58% to 4,921.60. (Tuesday rose 0.53% to 4,947.85.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
