October 16, 2026

USDCAD open (6:00 am ET) 1.4157, overnight range 1.4156-1.4199, close 1.4186

USDCAD took out the October support level in the 1.4185-1.4200 decisively overnight as traders are about 85% certain that the Fed will leave rates unchanged at its October 28 meeting. The catalyst for the move lower was Fed Chair Patrick Warsh who failed to mention anything about monetary policy reiterating “I don’t prejudge meetings.”

Bank of Canada Governor Tiff Macklem had a bit more to say.  He pointed out threat the BoC had looked past higher energy costs, but the longer they persist, the harder that strategy becomes.

CAD/US interest rate spreads narrowed in Canada’s favour

WTI traded 96.85-97.82 overnight and is trading near its session peak. Trump says Iran has asked for a halt to US attacks and that talks continue while also saying he had no plans to use nukes in Iran. Huh?  Is that another threat or is he merely justifying why Iran’s quest for nuclear weapons is valid?

There is no Canadian data of note today. US import prices rose 1.1% while export prices rose 2.2%.

USDCAD Technical Outlook

The intraday USDCAD bias has turned bearish while trading below 1.4200, after prices broke the floor of the October range and the uptrend line from September 11. The momentum indicators are mixed. The 4-hour MACD is falling deeper below zero and widening its gap under the signal line, and prices are closing in on the lower 4-hour Bollinger Band at 1.4131, and the RSI is deeply oversold.  

Longer term, the break below 1.4195 has confirmed the double top at 1.4292-1.4300 and ended the two-week standoff. The measured target of the pattern is near 1.4090, which lines up neatly with the 38.2 Fibonacci retracement of the September to October rally at 1.4087. The daily MACD has crossed below its signal line and the daily RSI has slumped confirming that momentum has shifted to the downside.

 A decisive break below 1.4087 would targets 1.4025. while a move above 1.4230 would shift the focus to 1.4300.

For today, support is 1.4130 and 1.4090. Resistance is 1.4190 and 1.4225. Today’s range 1.4120-1.4190.

FX Heat Map

FX open high low 6:00 am

Fed chair Kevin Warsh took the IMF stage in Thailand after a week of hot US inflation prints and gave traders precisely nothing to work with on rates. Price stability is the job, AI will be bumpy but ultimately a big win, and global central banks tightening together means no free riders. Fine sentiments, zero guidance. With core CPI at 0.3% against a 0.2% forecast and producer prices running 6.3% y/y against 5.3% expected, the market had braced for something sharper.

 Instead, October hike odds have slid to roughly 26% from 40%, with December still close to fully priced. The FOMC meets October 27-28 with the funds rate at 3.75%-4.00%.

Taking Stock

Asian equities indexes ended the week on a positive note. Japan’s Topix rose 1.67%, Australia’s ASX 200 gained 1.0% the Hong Kong Hang Seng rose 0.52%.

As of 5:30 am PT, the German Dax is up 0.90%, the French CAC-40 has risen by 0.33% and the UK FTSE 100 is flat. S&P 500 futures are up 0.13%, the US 10-year Treasury yield is 5.102%, the DXY is 101.72 and gold (XAUUSD) is $4,178.44.

EURUSD | Range 1.1151-1.1269

EURUSD is near the top of its range, as the dollar weakens across the board. Eurozone final September core-HICP held at 2.5% y/y, was unchanged, but French inflation was hotter than expected and keeps the ECB’s hike dilemma alive. French political and budget drama continues to be a headwind. The IMF didn’t help sentiment forecasting Eurozone growth at 1.1% for 2026 and 1.2% for 2027.

GBPUSD | Range 1.3267-1.3349

Sterling is the star among the majors and is at a three-week high and looking to break above 1.3350 for a retest of resistance at 1.3400. The rally driven by a combinations of a surprise bounce in UK GDP, a wave of hawkish commentary from the Bank of England (BoE), and a broader retreat in US Treasury yields which fueld widespread US dollar selling.

USDJPY | Range 157.80-158.18

USDJPY traded quietly in a fairly tight range. BoJ board member Junko Koeda said the Bank should not become overly cautious about raising rates and should adjust them in a timely manner, adding to the hawkish chorus ahead of the October 29-30 meeting. However, analysts still believe the BoJ will leave monetary policy unchanged at that meeting.

AUDUSD | Range 0.6916-0.6963

The Aussie bounced from the low as traders look past Thursday’s ugly jobs report even though the odds of a RBA hike on November 3 have collapsed below 20%. Prices were underpinned widespread US dollar weakness.

USDMXN | Range 18.3425-18.4644

USDMXN traded lower due to broad-based US dollar weakness and expectations that the Fed leaves rates unchanged at the end of the month. Nevertheless, the Fed-Banxico rate gap is the narrowest in years and Banxico minutes showed three members open to cuts. US and Mexican trade talks have stalled after Howard Lutnick opposed significant reductions in the 25% tariff on Mexican automobiles and the 50% levies on steel and aluminum.

CHINA

PBoC Fix: 6.7220 vs exp. 6.6947 (previous 6.7253)

Shanghai Shenzhen CSI 300 rose 0.11% to 4,4170.61

The EU and UK may be joining forces and align tariffs on Chinese EV’s, while Germany’s Finance Minister complained that China is not playing by the rules.

Sources: Investing.com, Newsquawk, Associated Press, FXStreet, investingLive, Tradingpedia, Business Recorder, TradingView