Middle East Supply Shock from US–Iran Standoff Sustains Oil Rally and Supports USD

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3560-1.3810

Euro                1.5900-1.6150

Sterling           1.8330-1.8580

WTI Oil (opening level) $94.68

The CAD/USD is opening at 1.3680 ( 0.7310 )

USD/CAD may navigate the region around the lower boundary of the chart, around 1.3560. A sustained break below the channel would reinforce the bearish bias and put downward pressure on the pair to fall toward 1.3473, the lowest since September 2024. But that is unlikey due to the uncertainty in Iran.

The market touched the nine-day EMA of 1.3714 yesterday, if that breaks the 50-day EMA at 1.3750, aligned with the upper descending channel boundary. Then advances above this confluence resistance zone would cause the emergence of the bullish bias and support the USD/CAD pair to explore the region around the four-month high of 1.3967, reached in December 2025.

So we have range trading now, waiting for clarity in the world.

Headlines

• Japan’s annual inflation rose to 1.5% in March 2026 from 1.3% in February, driven by higher transport and household item costs. Food inflation eased to 3.6%, while electricity and gas prices fell further on subsidies. Core inflation picked up to 1.8%, still below the 2% target. Month-on-month, CPI increased 0.4%, the strongest rise since January 2025.
• Trump’s Truth Social posts and decision to maintain a naval blockade of Iranian ports have hindered prospects for renewed talks with Tehran. The US-Iran ceasefire and the Israel-Lebanon truce were both extended, but disruptions have sharply reduced Middle East oil and gas shipments, tightening global supply.
• The S&P Global flash US Composite PMI rose to 52 in April 2026 from 50.3 in March, indicating modest growth. Services activity was weak despite a move back into expansion, while manufacturing saw its strongest output gain in four years, partly from stockpiling. Input costs and supply delays hit their worst since mid-2022, triggering the largest jump in selling prices since July 2022, and employment increased only slightly.
• US initial jobless claims rose by 6,000 to 214,000 in the week ending April 18, near expectations. Continuing claims edged up by 12,000 to 1.821 million. Both remain below last year’s averages, consistent with low layoff levels. Federal employee claims fell by 60 to 452.
• The Chicago Fed National Activity Index fell to -0.20 in March 2026 from +0.03 in February, its weakest since November 2025, as production, sales, and consumption/housing turned negative, partly offset by slightly stronger employment indicators.

Key Points

• Equities: US fell on higher oil and tech weakness, Europe steadied on earnings, while Asia was mixed as Korea outperformed.
• Volatility: VIX holding near 19 as oil and geopolitical risks keep markets cautious
• Digital Assets: Bitcoin steady but not leading, supported by IBIT inflows while ETHA sees outflows
• Fixed Income: Global yields back up on higher crude oil prices
• Currencies: US dollar grinds higher, with USDJPY approaching key 160.00 level.
• Commodities: Crude gains, natural gas tumbles, while fertilizer shortages and El Niño raise crop concerns