The USD/CAD pair is trading solidly near Friday’s high around 1.3800 during the early European trading session on Monday. The color pair is showing strength as the Canadian Dollar (CAD) performed weakly amid growing concerns about household spending.
On Friday, Statistics Canada reported that retail sales, a key measure of consumer spending, fell 0.2% month-over-month in October, when they were expected to remain flat. In September, a measure of consumer spending also fell by 0.9%.
Lower household demand may reinforce the need for further interest rate cuts by the Bank of Canada (BoC) in the near term.
Meanwhile, the US Dollar (USD) is trading slightly lower ahead of third-quarter US GDP data, which will be released on Tuesday. The US economy is expected to grow at a moderate pace of 3.2%.
Technical analysis of the USD/CAD pair
USD/CAD holds onto gains near 1.3800 on Monday. The pair is holding below the bearish 20-day Exponential Moving Average (EMA), keeping the short-term bias tilted to the downside with the retracement remaining below the average. Steady contraction in the EMA underscores the continued supply on the rise. The 14-day RSI is at 36, near oversold territory after a modest rebound from last week’s highs, while momentum remains fragile.
A sustainable recovery will require a daily close above the 20-day EMA to ease downward pressure that could increase the odds of an upward move towards the 1.3900 ring figure. Until then, the pessimistic setup continues and could be strengthened if the spot price breaks the August 7 low at 1.3720.
(The technical analysis for this story was written with the help of an artificial intelligence tool.)
Economic indicator
Annual GDP
Real annual gross domestic product (GDP), released quarterly US Bureau of Economic AnalysisIt measures the value of final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of a country’s overall economic health. The data is expressed at an annual rate, which means that the rate has been adjusted to reflect the amount that GDP would have changed over the course of a year, had it continued to grow at that specific rate. In general, a high reading is considered bullish for the US Dollar (USD), while a low reading is considered bearish.
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Next release:
Tuesday 23 December 2025 at 13:30 (previous)
repetition:
Quarterly
consensus:
3.2%
former:
3.8%
source:
US Bureau of Economic Analysis
The US Bureau of Economic Analysis (BEA) releases GDP growth on an annual basis for each quarter. After publishing the first estimate, the BEA reviews the data two more times, with the third version representing the final reading. The first estimate is usually the main market mover and a positive surprise is seen as a positive development for the US dollar, while a disappointing reading is likely to weigh on the US dollar. Market participants usually reject the second and third versions because they are generally not important enough to materially change the growth picture.
