Ella 
During Monday’s Asian session, USD/CAD stabilized around 1.3800, supported by a cautious Federal Reserve stance and improved Canadian retail sales.
The Federal Reserve recently cut rates for the first time since December but emphasized a gradual, “meet-by-meeting” approach rather than a rapid series of cuts. Fed Chairman Jerome Powell highlighted that the move was risk-management driven due to a weakening labor market and inflation concerns, with the US dollar index (DXY) rebounding to 97.70. The upcoming PCE price index release is expected to provide further insight into inflation trends.
On the Canadian side, preliminary August retail sales rose 1.0%, offsetting July’s 0.8% decline. This eased market fears of aggressive rate cuts by the Bank of Canada (BoC), which last week lowered rates by 25 basis points to 2.50%, citing a soft labor market and easing inflation.
Technical outlook:
Support: 1.3750 – short-term upward trend maintained above this level.
Resistance: 1.3830 – a break here could target 1.3900–1.3950.
Downside risk: A fall below 1.3750 may shift focus to 1.3700.
Summary: USD/CAD remains in a 1.3750–1.3830 range, with the pair likely to continue its rebound unless Canadian data weakens or US inflation signals shift the Fed’s trajectory.
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