October 26, 2026

USDCAD open (6:00 am): 1.4017, overnight range 1.3998-1.4044, close 1.4004

Welcome to the dark side British Columbia. The last time B.C. gave a conservative party a majority was in 1928 when Simon Fraser Tolmie was given the reins of the government. At the time, immigration policies were at hot topic as were “talking pictures,”, and a cartoon mouse that spawned a $194.3 billion entertainment behemoth. Henry Ford’s Model A was the AI of that era. Unfortunately, the Great Depression began a year later.

USDCAD trading was uneventful and consolidated last week’s losses, albeit with prices bid after support in the 1.3960 zone held.

Wednesday’s Bank of Canada decision is the main event with the odds for a 25 bp rate hike to 2.50%, around 80%.

The irony is that the Fed, facing an inflation problem, won’t raise rates, while the data-dependent BoC, looking at data suggesting Canada doesn’t have an inflation problem, is prepared to hike.

WTI gapped lower at the open after Friday’s fears that the US would launch new attacks on Iran proved unfounded.  However, Houthi actions against Saudi Arabia are limiting the downside.

There is no Canadian data of note today and only the Chicago Fed National Activity index from the US.

USDCAD Technical Outlook

The intraday USDCAD technicals are mildly bullish while trading above 1.3990. However, the rally from Friday’s low stalled at the top of the two-week downtrend channel and the 100-day moving average at 1.4045. The subsequent retreat keeps the focus on support at 1.3960.

Longer term, Friday’s slide that stalled in the 1.3960 area suggests a short-term floor is in place and argues for additional 1.3960-1.4060 consolidation which would give momentum indicators to move from extremely oversold levels.

As long as USDCAD is below the 100-day ma, the 200-day moving average at 1.3883 remains the target. A daily close above 1.4045 would confirm a bottom and open 1.4140.

For today, USDCAD support is 1.3990 and 1.3960. Resistance is 1.4045 and 1.4085.

Today’s Range 1.3960-1.4050.

FX Heat Map

FX open high low 6:00 am

Busy, Busy, Banker Bees

Five major central banks will announce interest rate decisions this week, including the Reserve Bank of New Zealand (RBNZ), the Bank of Canada (BoC) and the Fed on Wednesday, the European Central Bank (ECB) on Thursday and the Bank of Japan (BoJ) on Friday. The European and British central bankers should be well-rested as daylight saving time ended in Europe and the UK.

Wednesday gets an additional risk injection when Alphabet, Microsoft and Amazon release Q3 earnings numbers. Investors will want to see evidence that the AI spending spree is paying its way in an elevated interest rate environment.

The US 10-year is at 4.984%, below 5% after three weekly declines, and the shrinking yield gap between the US and the rest of the G10 is quietly draining the dollar’s appeal. The Dollar Index is at 101.78.

Taking Stock

Asian equities closed higher, led by a 0.51% rise in Hong Kong’s Hang Seng. Japan’s Topix and Australia’s ASX 200 finished with gains of 0.18% and 0.17%.

As of 5:45 am PT, European bourses are higher. The German DAX is up 0.94%, the French CAC 40 has gained 0.88% and the UK FTSE 100 is up 0.48%. S&P 500 futures are up 0.26% the DXY is 101.88, the 10-year Treasury yield is 4.984% and gold (XAUUSD) is $4,020.65..

EURUSD | Range 1.1187-1.1227

The euro is flirting with its session low after the Asia pop higher on the news that Moody’s left the French debt rating unchanged. Paris is still burning and political unrest has spread to Belgium and Italy. Ifo surprised higher at 90.2. The ECB is expected to deliver a hawkish hold on Thursday.

GBPUSD | Range 1.3342-1.3388

Cable is near the bottom of its overnight band due to an abundance of caution ahead of the UK Budget due Wednesday. New measures rumoured to be introduced are a tax hike on bank profits and new rules to force online retailers to collect VAT owed by third-party merchants.

USDJPY | Range 156.65-157.50

The yen gave back its haven bid as oil cooled, and USDJPY is trading at the top of its overnight range. The BoJ is expected to hold at 1.25% on Friday, but Governor Ueda’s hawkish tone keeps a December or January hike in play, and September core CPI at 2.1% y/y, a nine-month high, gives the hawks something to point at.

AUDUSD | Range 0.7022-0.7040

AUDUSD traded higher, with prices underpinned by fresh, hawkish comments by RBA Assistant Governor Sarah Hunter. She warned that rates may need to rise further, and some traders and analysts think that a hike may occur at the November meeting. A hotter-than-expected inflation number on Wednesday would be viewed as confirmation.

USDMXN | Range 18.6446-18.7608

USDMXN traded narrowly, but with a bid, as prices continued to be underpinned by narrowing US and MXN interest rate spreads. Traders are also unhappy about the lack of progress with the Mexican and US trade talks.

CHINA

PBoC Fix   6.7162 vs exp. 6.6691 (prev. 6.7180)

Shanghai Shenzhen CSI 300 fell 0.04% to 4,103.54

China’s 5^th Plenum is underway, Xi Jinping delivered the Work Report.

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