July 15, 2025
USDCAD open: 1.4061, overnight range 1.4040-1.4068, close 1.4160
USDCAD was steady overnight and consolidated its losses following yesterday’s tame US inflation report, and Trump’s flip flop on Strait of Hormuz tolls.
Yesterday, Trump tweeted “Oil is flowing like never before, thanks to the awesome Power of the United States Military.” The Hormuzstraitmonitor.com noted that only 25 ships have made the transit in the past 24 hours which is just 21.6% of its average daily volume. Perhaps Trump was referring to the local Jiffy Lube.
The Bank of Canada meets today to tell Canadians that rates are being left unchanged and that: “Economic activity in Canada has been weak and uncertainty about US trade policy persists. The conflict in the Middle East is ongoing and oil prices remain elevated.” That’s what they said in June and nothing has changed.
WTI traded sideways in a 79.30-80.84 range. Prices are getting support from the US and Iran war but also from sharply lower demand from China. Chinese refineries crude processing has dropped to 2020 pandemic lows.
Canada Manufacturing Sales rose 1.3% m/m in May (forecast 1.1%, previous 3.9%) and Wholesale Sales were flat, compared to the forecast for a 0.7% drop.
USDCAD Technical Outlook
The intraday USDCAD technicals ( 1-hour and 4-hour chart) are bearish following Tuesday’s steep slide from above 1.4160 through the drove the lower Bollinger band to a 1.4031 low. Price has since bounced to 1.4067 and the hourly RSI has recovered to the mid-50s, suggesting the initial downside momentum is fading, but the pair remains capped below the 100-hour SMA at 1.4145. A decisive break below 1.4030 targets 1.4005 and then 1.3980 while a move back above the 1.4105 would shift focus to 1.4170.
The longer-term outlook remains bullish while prices are above the 100-day moving average at 1.3873, which continues to underpin the advance from the June base near 1.3600. However, the daily RSI has plunged from overbought levels above 80 to 31.6, warning that the correction from the 1.4300 peak may have further to run before the uptrend reasserts itself.
For today: USDCAD support is at 1.4030 and 1.4005. Resistance is at 1.4105 and 1.4150.
Today’s expected range is 1.4030-1.4105.
FX Heat Map
FX open high low 6:00 am
US Inflation Cooled
Yesterday, negative inflation in June (actual -0.4%) and the second consecutive dip in core-inflation (actual 0.0% vs 0.2% forecast and in May) essentially guaranteed the Fed will leave rates unchanged at its July 29 meeting.
Today’s PPI data confirmed the view with June PPI falling 0.3% (forecast 0%), and the May result revised down to 0.6% from 1.1%. The same pattern occurred with core-PPI which rose just 0.2% (forecast 0.4%) and May’s result revised down to 0.1%from 0.4%.
Yesterday in Washington, Fed Chair Warsh told policymakers not to get too excited because the CPI data was “just one number.” Chicago Fed President Austan Goolsbee echoed those comments.
Taking Stock
Asian equity indexes closed with gains led by a 1.40% rise in Hong Kong’s Hang Seng. Japan’s Topix rose 1.22% and Australia’s ASX 200 closed up 0.37%.
As of 5:40 am PT, European bourses are mixed. The German DAX is down 0.53%, while the French CAC 40 and the UK FTSE 100 are flat. S&P 500 futures are up 0.22%, the 10-year Treasury yield is 4.569%, the DXY is 100.92 and gold is 4,064.38..
EURUSD | Range 1.1406-1.1444
EURUSD is consolidating yesterday’s post-US CPI boost but is trading with a negative bias because oil prices remain elevated. Topside gains were hampered by weaker-than-expected Eurozone Industrial production numbers (actual -0.2% m/m, forecast 0.2%).
GBPUSD | Range 1.3381-1.3424
GBPUSD peaked in Asia and traded lower into the NY opening with price action mirroring broad US dollar moves. Today’s focus is on the FIFA World Cup Semi-Final, where England is a slight favourite to beat Argentina.
USDJPY | Range 161.97-162.42
USDJPY is slightly firmer after yesterday and today’s US inflation numbers removed the immediate risk for a Fed rate hike. Prices are underpinned by elevated crude prices and downgraded expectations for domestic pension funds reallocating investments back into Japan. Machinery orders were weaker than expected in May, falling 12.4% compared to April’s increase of 8.7%.
AUDUSD | Range 0.6970-0.6995
The Australian dollar ticked higher on improved risk sentiment from the tame US inflation data. However, the gains were tempered by the ongoing US and Iran hostilities and elevated oil prices.
USDMXN | Range 17.3938-17.4337
USDMXN is trading sideways on improved risk sentiment following downgraded odds of a Fed rate hike and touched the session low, post PPI.
CHINA
- PBoC Fix: 6.7910 vs exp. 6.7695 (prev. 6.7990)
- Shanghai Shenzhen CSI 300 fell 0.20% to 4,786.78
Q2 GDP rose 4.3% (forecast 4.5%, Q1 5.0%) June Industrial Production rose 5.3% y/y (forecast 4.6%) and Retail Sales rose 1.0% (forecast -0.1%, previous -0.6%)
China’s growth is a tale of an unbalanced economy. Strong manufacturing and export growth masked a weak domestic economy with household spending soft. Analyst say it raises concerns as to how long its unbalanced growth model can be sustained
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
