June 23, 2026
USDCAD open: 1.4181, overnight range 1.4151-1.4192, close 1.4162
USDCAD traded sideways but with a bid in a quiet overnight session. Yesterday’s hotter than expected inflation reading masked underlying weakness and was rightfully ignored. Nothing in the CPI data should motivate the BoC to raise rates, especially as its own preferred measure CPI median was unchanged at 2.1%.
However, a comment from the Chicago Fed President acknowledging an “inflation problem” and the lingering sentiment of a hawkish Fed underpinned US rates and weighed on CAD/US interest rate differentials. The 2-year CAD/US spread widened by 8bps to -138.4 underpinning the currency.
Weaker gold and oil prices are also supporting USDCAD. WTI has fallen from 77.14 on Monday to 73.69 this morning on news that ships are sailing through the Strait of Hormuz.
BoC Governor Tiff Macklem is speaking about the Global Financial System in Quebec this morning at 9:40 am followed by a press conference around 10:50 am.
USDCAD Technical Outlook
The intraday chart is bullish following the break above 1.4150, with USDCAD trading near 1.4190 and hugging the upper Bollinger Band on both the 1-hour and 4-hour charts. The 1-hour MACD and RSI confirm a positive momentum. A sustained break above 1.4190 would target 1.4225 initially, followed by the major resistance zone at 1.4280.
In the short term, USDCAD is decisively bullish above the daily 100-day and 200-day moving averages, both clustered near 1.3815. The rally from the May lows remains intact and has accelerated following the breakout through the 1.4000 and 1.4150 resistance zones. Prices are now testing levels last seen in early April 2025, with the next major upside target located near 1.4280 and then 1.4350.
The daily MACD continues to strengthen and confirms the underlying uptrend. However, the daily RSI is an eye-catching 97.7, an exceptionally overbought reading that is rarely sustained for long periods.
For today: USDCAD support is at 1.4150 and 1.4110. Resistance is at 1.4200 and 1.4280. Today’s expected range is 1.4120-1.4210.
FX Heat Map
FX open high low 6:00 am
He’s Put a Cork in It.
There was an absence of market-moving TruthSocial rants about bombing Iran which gave Strait of Hormuz ship captains confidence that the Vance/Iran peace deal would last the day. To that end, 29 ships have made the passage in the past 24 hours and 12 more are underway according to hormuzstraitmonitor.com.
That shifted the focus to regional economic data, UK politics, and concerns around the timing of the inevitable joint US and Japan FX intervention.
Hawkish Fed Outlook Driving Dollar Gains
Markets are convinced that in the near-term Fed Chair Kevin Warsh will not give in to Trump’s wish for lower rates. Instead, traders are convinced that when Warsh said the Fed remains “unambiguously and unanimously” committed to delivering 2.0% inflation, he was saying rates are going higher. Chicago Fed President Austan Goolsbee reinforced that view yesterday when he said “we’ve been dealing with an inflation problem that’s well above the target and has been going the wrong way.”
That sentiment has been driving US dollar gains for the past week. The US dollar index (DXY) is up 1.97% in the past month and 3.34% in the last six months.
Taking Stock
Asian equity dropped on tech stock jitters. Japan’s Topix fell 2.56%, Hong Kong’s Hang Seng Index dropped 1.82%, and Australia’s ASX 200 is down 0.33%.
As of 7:30 am PT, European bourses are in the red led by a 0.97% drop in the German DAX. The French CAC 40 is down 0.65% and the UK FTSE 100 has lost 0.41%. S&P 500 futures are down 1.41%, the 10-year Treasury yield is 4.507%, the DXY is 101.32, and gold (XAUUSD) is 4,119.02.
EURUSD | Range 1.1405-1.1439
EURUSD is suffering from comments from ECB President Christine Lagarde downplaying risks for another rate hike. She said “we see no evidence yet of de-anchoring of inflation expectations or second-round effects that would warrant a more forceful policy response at this stage.” Chicago Fed Goolsbee’s comment added fuel to the fire. Eurozone composite PMI rose to 49.5 from 48.5 in June which still points to sluggish activity. EURUSD technicals are bearish with a decisive break below 1.1400 targeting 1.1290.
GBPUSD | Range 1.3213-1.3257
GBPUSD is trading sideways but with a bearish bias due to the hawkish outlook for US rates. Former Manchester mayor Andy Burnham has already been anointed as the next UK Prime Minister to be fired before his term ends, even though the nominations do not officially open until July 1. UK politics may hamper GBPUSD gains in the short-term. Meanwhile, UK Services PMI dropped down to 48.7 from 49.3 in June, which is the fastest rate of change in three years, weighed on GBPUSD.
USDJPY | Range 161.28-161.74
USDJPY traders are seemingly unworried about FX intervention even after Finance Minister Katayama said that she spoke with US Treasury Secretary Scott Bessent, a veiled threat of joint FX action.
AUDUSD | Range 0.6942-0.7007
Aussie traded lower due to broad US dollar strength on safe-haven demand due to falling tech stocks globally and lower commodity prices. Australian PMI data was a tad better than expected but not a factor.
USDMXN | Range 17.3609-17.4898
USDMXN has recovered most of its losses that occurred last week when talk of an Iran/US peace deal fueled risk on sentiment. Today, the focus is on higher US interest rates and what Banxico will have to say about it at Thursday’s monetary policy meeting. Mexican retail sales numbers are due today but will not have any bearing on FX.
CHINA
- PBoC Fix: 6.8171 vs exp. 6.7762 (prev. 6.8150).
- Shanghai Shenzhen CSI 300 FELL 2.77% to 4,919.39
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
