January 21, 2026

USDCAD open: 1.3843, overnight range 1.3800-1.3843, close 1.3838

USDCAD is consolidating this week’s losses ahead of the Trump Circus in Davos. The annual “aren’t we grand” summit of people who perceive themselves as the global elite hasn’t garnered this much attention since Trump 1.0 in 2018.  Trump will be speaking shortly.

Prime Minister Mark Carney had his Winston Churchill moment. He delivered a scathing rebuke to Trump’s America First agenda without naming Trump or America. He framed the global economy as entering a structural transition, saying old assumptions about growth, inflation, globalization, and financial stability no longer hold. It was brilliant!

Carney has already left Davos.

WTI oil inched higher in a 59.23–60.60 band and is near the top in early NY trading. Prices are supported by the soft US dollar and uncertainty around Trump and tariffs.

Canada Industrial Product and Raw Material Price indexes are ahead, along with US construction spending and pending home sales.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish inside a 1.3810-1.3850 range which will contain price action until after Trump’s Davos remarks. A break below 1.810 targets 1.3740 while a move above 1.3850 puts 1.3950 in play.

The medium-term technicals are bullish above 1.3810. However, that line will be tested as   that the consolidation phase between the 100 day and 200 day moving averages appears to have ended with the break below 1.3840. A decisive move below 1.3810 targets 1.3650.

For today, USDCAD support is at 1.3810 and 1.3750. Resistance is at 1.3850 and 1.3870.

Today’s Range: 1.3770-1.3870

The Calm Before the Storm

Financial markets are in the eye of Hurricane Trump, who is scheduled to address Davos delegates and the world around 8:30 am ET. Air Force One was forced to return to base over a “minor electrical” issue, which delayed Trump’s arrival in Switzerland and could delay the speech by as much as three hours. No one really knows what Trump will say (including Trump), but NATO, Greenland, and his Board of Peace are probably sure things.

FX markets traded mixed in narrow ranges, global equity indices traded negatively, the 10-year Treasury yield was steady, but gold prices surged by 2.7% to a peak of 4888.13.

Defending Fed Independence

Fed Chair Jerome Powell plans to attend the oral arguments at the Supreme Court, which challenge Trump’s ability to fire Governor Lisa Cook. Trump sic’d his Justice Department on Powell, who now faces a criminal investigation for renovation cost overruns. Powell said the move was Trump’s way of usurping the Fed’s independence, and his attendance at today’s hearing is meant to reinforce that view. Powell’s decision annoyed Trump lackey and Treasury Secretary Scott Bessett, who claimed Powell was trying to influence the decision.

Taking Stock

Asian equity markets were down for the third day in a row except Hong Kong’s Hang Seng Index, which gained 0.37%. Australia’s ASX 200 lost 0.37%, and Japan’s Topix was down 0.99%. The Topix is suffering from rising bond yields and election drama.

As of 5:30 PT, European bourses are in the red, led by a 1.00% drop in the German DAX. The French CAC 40 is down 0.33%, and the UK FTSE 100 has lost 0.21%. S&P 500 futures are down 0.11%, the US Dollar Index is 98.49, the US 10-year Treasury yield is 4.291%, and gold (XAUUSD) is 4876.17.

EURUSD

EURUSD traded quietly in a 1.1701–1.1734 range but with a bearish bias ahead of Trump’s Davos speech. Rising tariff risks between the US and EU are weighing on prices, in addition to increased risk-aversion sentiment. The Trump/Greenland saga overshadowed better-than-expected German and Eurozone ZEW data yesterday.

GBPUSD

GBPUSD is on the defensive in a 1.3403–1.3457 range after UK inflation rose 3.4% y/y in December (forecast 3.3%, November 3.2%). ING analysts suggest today’s result is just noise and unlikely to lead to any change in BoE monetary policy.

USDJPY

USDJPY churned in a 157.82–158.28 range, torn between geopolitics and domestic politics. Prime Minister Sanae Takaichi’s election call and plans for tax cuts and debt-fuelled growth have roiled markets and sent long-term JGB yields to all-time highs.

AUDUSD

AUDUSD caught a bid and rose from 0.6728–0.6758, extending the rally that began on Monday. Prices are underpinned by a generally soft US dollar and by higher commodity prices.

USDMXN

USDMXN is trading at the bottom of its 17.5320–17.6105 range. The selling pressure is all Trump, with domestic Mexican influences having little impact. Mexican retail sales rose 4.4% y/y in November.

China

PBoC Fix: 7.0014 (prev. 7.0006)
Shanghai Shenzhen CSI 300 rose 0.09% to 4723.07

FX  open high low

FX Heat Map (6:00 am) -One Week

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview