October 23, 2026
USDCAD open (6:00 am): 1.4003, overnight range 1.3982-1.4019, close 1.4009
The Loonie is making like a beaver and gnawing on support in the 1.3990 area which is proving to be stubborn, despite a generally soft greenback against the majors. The sharp declines in US 2-year and 10-year Treasury yields has narrowed the CAD/US interest rate spreads and the rise in oil prices is also a factor weighing on USDCAD.
Do as I say, not as I do!
Sunday October 18, 2026-Trump says: “Please let this Letter serve to represent my Complete and Total Endorsement of Bibi Netanyahu in his upcoming Race for Re-Election as Prime Minister of Israel.”
Wednesday October 21, 2026-U.S. embassy in Ottawa releases a statement: “All Canadians should refrain from attempting to participate in or influence U.S. elections in any way. Americans decide America’s elections”
Political scientist Dov H. Levin identified at least 81 U.S. interventions in foreign elections between 1946 and 2000, including 53 covert operations.
OIL
WTI traded higher into the weekend, rising from $98.85 to $101.62 in NY open. Trump’s latest musing about attacking Iran with Israel after the mid-term elections is a factor. Apparently, Trump’s decision to delay attacks until after the midterms, is because he hopes that American voters are not smart enough to remember how much they hate the war with Iran when the go to polls
Prices were further underpinned by reports that Houthis renewed attacks on Saudi Arabia, and because of IRGC claims of strikes on shipping in the Gulf. And for good measure, a Libyan pipeline shutdown trimmed supply.
Canadian retail sales jumped 1.2% in August, with volumes also rising 1.2% and core sales increasing 1.1%. However, the strength may partly reflect back-to-school spending and other seasonal factors, making it premature to declare a sustained consumer recovery. Statistics Canada’s preliminary estimate points to a further 0.7% increase in September, conclusions.
Still ahead, US Michigan October Consumer Sentiment (forecast unchanged at 46.3)
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while trading below 1.4020. Prices are pressing against support in the 1.3990 area and looking for decisive break below this level targets 1.3950. A recovery above 1.4020, will shift the focus to 1.4060.
Longer term, yesterday’s close at 1.4009 was the first daily close below the 100-day moving average at 1.4045 since mid-September, undermining the base that appeared to be forming. Even so, further USDCAD losses are hampered by momentum indicators which show USDCAD is extremely oversold.
As long as USDCAD is below the 100 day ma, the 200-day moving average at 1.3883 is the target.
For today, USDCAD support is 1.3960 and 1.3930. Resistance is 1.4020 and 1.4060
Today’s Range 1.3960-1.4040
FX Heat Map
FX open high low 6:00 am
Bonds Blink, Investors Choke
Thursday was the day the AI trade finally met the cost of money. The Nasdaq dropped 2.6% and the S&P 500 lost 1.2%, its worst session since July, as investors decided that building data centers with 5% money is a different business than building them with free money. Meta fell 7% after investors choked on the news that capex would increase around $145 billion to a gargantuan $825 billion in total future AI-related obligations.
Treasuries caught a safe haven bid that pushed the 10-year yield down from 5.13% to 4.97%. This morning the 10-year sits at 4.963% and the 2-year at 4.670%.
Taking Stock
Asian indices closed on a mixed note. Japan’s Topix fell 0.78%, Hong Kong’s Hang Seng rose 0.69% and Australia’s ASX 200 finished unchanged.
As o 5:40 am PT, European bourses are trading negatively, led by a 0.97% drop in the German DAX. The French CAC-40 has lost 0.86% and the UK FTSE 100 is down 0.57%. S&P 500 futures have dropped 0.40%, the 10-year Treasury yield is 4.967%, the DXY is 101.797and gold (XAUUSD) is $4,025.81
EURUSD | Range 1.1185-1.1227
EURUSD traded choppily and with a negative bias after German and Eurozone flash PMIs were lower than expected. French fiscal drama and civil unrest are weighing on prices, as is Moody’s verdict on French debt coming up after the close. ECB’s Fabio Panetta called rising yields a drag on growth rather than a crisis, and markets still price nearly three 25 bp rate hikes by the end of 2027.
GBPUSD | Range 1.3365-1.3408
Cable drifted lower while consolidating this week’s gain. Prices were weighed down by weaker-than-expected September retail sales, which fell 0.4% (forecast -0.1%, August 0.7%), and slumping GfK consumer confidence (actual -24 against -15 expected).
USDJPY | Range 156.08-157.16
USDJPY hit 156.08 in Asia, a one-month low, thanks to a wave of safe-haven demand due to the US tech stock jitters. USDJPY buyers reappeared due to higher oil prices and after September national CPI rose to 2.1% from 1.9%, with the ex-fresh food and energy measure at 2.4% against 2.3% forecast. Economy Minister Minoru Kiuchi explicitly stated that Japan has yet to see the conditions met for the government to officially declare an end to deflation.
AUDUSD | Range 0.7005-0.7026
AUDUSD consolidated this week’s gains in a fairly tight band despite mostly ugly flash PMI numbers. The composite fell to 47.7 from 51.3, the first contraction since May, and services PMI slumped to 47.8 from 51.9. Regardless, expectations for a 25 bp rate hike at the next RBA meeting underpinned prices.
USDMXN | Range 18.6917-18.8079
USDMXN is trading at levels last seen in November 2025, driven by risk aversion sentiment from tech/AI stock weakness and yesterday’s mid-October headline inflation data (actual 3.62%, forecast 3.60%, previously 3.42%). Nevertheless, Banxico is widely expected to sit at 6.50% through 2027 while the Fed leans hawkish.
CHINA
PBoC Fix 6.7180 vs exp. 6.6758 (prev. 6.7195)
Shanghai Shenzhen CSI 300 rose 1.71% to 4,105.33
Sources: Investing.com, Newsquawk, Associated Press, FXStreet, investingLive, Tradingpedia, Business Recorder, TradingView
