July 29, 2025
USDCAD open: 1.4104, overnight range 1.4085-1.4110, close 1.4108
USDCAD traded sideways due to a lack of interest ahead of the FOMC meeting this afternoon. Iran’s renewed attacks on shipping and its neighbors was largely ignored except that the bump in crude prices acted as a minor drag on USDCAD gains.
The BoC Summary of Deliberations from its July 15 monetary policy meeting are released this afternoon. However, the FOMC meeting is what traders will focus on as it is the outlook for US interest rates that is driving FX market direction.
WTI oil popped from 79.13 yesterday to 82.76 this morning for a gain of 4.6% after Iran demonstrated that it controls the Strait of Hormuz and not Trump.
USDCAD Technical Outlook
The intraday USDCAD technicals are neutral and consolidating just below the midpoint of a well-defined 1.4060-1.4150 band. Momentum indicators have stabilized in neutral territory.
Longer term, USDCAD remains trapped in a broader 1.3860-1.4460 band that has contained price action since the swing low posted in February. The pair is currently trading in the lower half of that range after failing to sustain July’s push toward the top. A topside break above 1.4460 would open the door to a test of 1.4630, while a slide back below 1.4050 would point to a retest of 1.3860.
For today: USDCAD support is at 1.4080 and 1.4050. Resistance is at 1.4140 and 1.4170.
Today’s expected range is 1.4060-1.4150
FX Heat Map
FX open high low 6:00 am
Lay it On the Line
Fed Chair Kevin Warsh and company will tell the market what’s what with interest rates this afternoon at 2:00 pm. Warsh is on record for disdaining “forward guidance” and believes that Fed officials “talk too much,” so whatever the decision is, don’t expect a detailed account of the decision process. And certainly do not expect him to tip his hand about the September decision.
Yesterday’s US Consumer Confidence Index fell by 1.4 points to 90.8 in July, down from an upwardly revised 92.2 in June. The present situation softened for the third month in a row, falling 3.6 points to 114.9.
Iran Taking Shots at Shipping and Neighbors
The IRGC claimed to have attacked three ships in the Strait of Hormuz, forcing them to reverse course. They also flung missiles and drones at Saudi Arabian oilfields and Jordan, although all were intercepted and destroyed.
Reuters reported that Iran will be receiving 400 shoulder-launched, Chinese-made, air defense missile systems within weeks.
Taking Stock
Asia equity indexes closed with Japan’s Topix rising 0.26%, the Hong Kong Hang Seng gaining 1.96% and Australia’s ASX 200 climbing 1.02%.
As of 5:30 am PT, European bourses are mixed. The UK FTSE 100 index and the German Dax are flat while the French CAC-40 is down 0.87%. S&P 500 futures are unchanged, the 10-year Treasury yield is 4.629%, the DXY is 101.46 and gold is 4,018.15.
EURUSD | Range 1.1374-1.1404
The single currency ticked higher overnight and is flirting with 1.1400 although trading is muted. The Eurozone data calendar lacked top tier reports, so traders twiddled their thumbs until today’s Fed decision. A dovish Fed bias will boost EURUSD to 1.1450 while a hawkish outlook puts 1.1320 in play.
GBPUSD | Range 1.3279-1.3309
Sterling was uninspired and traded sideways with traders having to deal with the Fed decision today and the Bank of England tomorrow. The BoE is expected to leave rates unchanged. Yesterday’s BRC shop price inflation cooled to 0.9% y/y from 1.9% in June, adding to the case for a BoE hold.
USDJPY | Range 163.28-163.88
USDJPY drifted aimlessly ahead of the Fed but was underpinned by firmer US Treasury yields. Domestic traders were further distracted by an earthquake in the Kumamoto region that killed at least 18 people, so far. The news gives the BoJ another reason to leave its benchmark rate unchanged on Friday, alongside PM Takaichi’s push to cut the food sales tax.
AUDUSD | Range 0.6935-0.6981
AUDUSD is at its session low after quarterly and annual CPI readings were lower than expected. Headline CPI slowed to 3.8% y/y from 4.0%, which was all that was needed for traders to downgrade RBA rate hike expectations, which were already low.
USDMXN | Range 17.4277-17.4909
The peso ticked higher ahead of the Fed meeting and is at the top of its range in NY. Prices were underpinned by the news of Iran’s renewed attacks on shipping and neighboring countries.
CHINA
- PBoC Fix: 6.7899 vs exp. 6.7635 (prev. 6.7928)
- Shanghai Shenzhen CSI 300 rose 0.67% to 4,600.26
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
