June 12, 2026

USDCAD open: 1.3983, overnight range 1.3959-1.3996, close 1.3967

Yesterday, Trump’s threat to bomb Iran “hard” drove USDCAD to 1.4024, but once again, the TACO trade performed brilliantly. Later in the day, Trump’s 39th claim that he is on the cusp of signing an Iran deal sent the greenback and USDCAD tumbling. The retreat quickly found a floor, and prices drifted higher in Europe and into NY because, really, what is a “deal” with Trump really worth? USDCAD is further supported by the dovish bias in the BoC monetary policy outlook.

Trump’s decision to not extend CUSMA and opt for annual reviews points to at least two more years of trade turmoil. The Carney government know it, and US-Canada Trade Minister Dominic LeBlanc said he expects a bilateral deal with Mexico.

For now, traders are more interested in the World Cup, which gives them an excuse to sit on the sidelines until next Wednesday’s FOMC meeting.

WTI oil prices dropped from 93.43 yesterday in Europe to 83.23 in early NY trading today but have since bounced to 84.88. Oil traders bought Trump’s “end-of-war” claim hook, line and sinker, yet Bloomberg shows that just 2 ships made it through the Strait of Hormuz. Furthermore, many analysts expect that it will take many months before shipments normalize.

Michigan Consumer Sentiment is expected to have improved to 46 from 44.8 in May.

USDCAD Technical Outlook

The intraday technicals are bullish above 1.3905, but the rally is consolidating just below 1.4000. The 4-hour chart shows the upper Bollinger Band at 1.4032 which should cap gains. The 4-hour RSI has cooled from overbought levels, suggesting USDCAD is digesting gains rather than reversing. A break below 1.3955 targets 1.3905, with channel support at 1.3870.

Longer term, USDCAD is bullish above 1.3820, the daily 200-day moving average, supported by the steep uptrend channel intact since the May low. The daily MACD confirms the bullish bias, however the daily RSI has breached the extreme overbought threshold, warning that the trend is vulnerable to a corrective pullback.

For today: USDCAD support is at 1.3955 and 1.3905. Resistance is at 1.4000 and 1.4035. Today’s expected range is 1.3940-1.4020.

FX Heat Map

FX open high low 6:00 am

If You Say It Loud and Often, Is It True?

Trump apparently subscribes to the notion that loud, repetitive claims are true if repeated often enough. Last night he tweeted that the end of the Iran war was nigh.  “Discussions and final points have been, in both concept and great detail, approved by all parties involved, including the United States, Israel, Saudi Arabia, UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, Egypt, and others. It is the 39^th time he has made such a claim.

Ever hopeful oil traders took the bait and drove oil prices down around 8.7%.  The US dollar gave up some gains as did US Treasuries. Global equities rallied but that likely had more to do with the SpaceX IPO which has made Elon Musk the world’s first trillionaire.

Taking Stock

Asian equities markets jumped aboard the “Risk-On” train after Trump’s latest claim about the end of his war with Iran. The Australian ASX 200 soared 1.98%, Japan’s Topix gained 1.35%, and the Hong Kong Hang Seng Index climbed 1.93%.

As of 6:50 a.m., European bourses are in rally mode. The French CAC 40 is up 1.70%, the UK FTSE 100 has gained 1.07%, and the German DAX is up 1.54%. S&P 500 futures are up 0.42%, the 10-year Treasury yield is 4.454%, the DXY is 99.73, and gold (XAUUSD) is 4,211.94.

EURUSD | Range 1.1557-1.1590

EURUSD consolidated yesterday’s gains and is trading with a small bid, supported by hopes that Trump’s war with Iran is over and by yesterday’s well-telegraphed ECB rate hike to 2.25%. The hike was in response to price pressures stemming from the energy fallout from Trump’s Iran war. Policymakers expect growth to slow and inflation to rise. Today’s German HICP came in at 2.7% as expected. The intraday technicals suggest that a break above 1.1580 will extend gains to 1.1650.

GBPUSD | Range 1.3384-1.3426

Sterling shrugged off weak March GDP data (actual -0.1%, forecast -0.1%, previous 0.3%) and soft April Manufacturing Production (actual 0.4% m/m, previous 1.2%). Instead, optimism around the potential for the end of the Iran war and lower oil prices underpinned the currency. GBPUSD is still in a downtrend while prices are below 1.3470.

USDJPY | Range 159.91-160.38

USDJPY climbed steadily overnight, with traders ignoring the sharp drop in oil prices, the threat of intervention, and expectations of a BoJ rate hike to 1.00% on Tuesday. Traders appear more concerned about the latest US inflation reports (CPI and PPI), which support calls for a Fed rate hike by year-end.

AUDUSD | Range 0.7021-7054

Aussie snapped its week-long downtrend with yesterday’s break above 0.7000, and it consolidated the rally overnight. The gains are merely a correction while prices are below 0.7080. The RBA decision to pause hiking rates is acting as a drag on gains.

USDMXN | Range 17.1771-17.2723

USDMXN dropped sharply as the focus returned to carry trades and Mexico’s huge rate advantage over the US on the heels of fading geopolitical risks. But it is not all sunshine and roses. Trump is not extending the USMCA and is opting for annual reviews.

CHINA

• PBoC Fix:  6.8109 vs exp. 6.7640 (prev. 6.8150)
• Shanghai Shenzhen CSI 300 rose 1.16% to 4,777.32

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