- USD/CAD might retest the recent low of 1.3781 from six months ago.
- A decisive move above the 1.3886 level, represented by the nine-day EMA, could strengthen the price’s upward trajectory in the near term.
- The currency pair could challenge the upper limit of its downward channel, approaching the 1.3900 mark.
The USD/CAD pair is strengthening for the second day in a row, trading near 1.3890 during Monday’s European trading hours. However, a technical assessment of the daily chart suggests an ongoing downtrend, with the pair consistently trending downwards within a well-defined descending channel pattern.
Furthermore, the 14-day Relative Strength Index (RSI) is holding above 30, suggesting a possible continuation of the short-term upward correction. Nevertheless, as the RSI remains below 50, the overall negative perspective remains in place. Currently, the USD/CAD pair is testing the nine-day Exponential Moving Average (EMA), potentially indicating a shift towards bullish momentum in the short run.
Looking at potential declines, the USD/CAD pair could revisit the six-month low of 1.3781, which was last observed on April 21. A definitive break below this level would reinforce the bearish sentiment, potentially pushing the pair toward the lower boundary of the descending channel around the 1.3500 region, with further support anticipated near 1.3419 — the lowest level recorded since February 2024.
