USD/CAD Price Forecast: Tests nine-day EMA near 1.3900 resistance level

• The USD/CAD pair could revisit the six-month low of 1.3781.
• The successful breach above the nine-day EMA of 1.3886 would improve the short-term price momentum
• The pair may test the upper boundary of the descending channel near 1.3900.

The USD/CAD pair gains ground for the second successive day, trading around 1.3890 during the European session on Monday. However, technical analysis on the daily chart indicates a prevailing bearish trend, with the pair continuing to move lower within a clearly defined descending channel.

Additionally, the 14-day Relative Strength Index (RSI) remains above the 30 level, signaling the potential for a continued short-term corrective bounce. However, with the RSI still below the 50 threshold, the broader bearish outlook remains intact. However, the USD/CAD pair tests the nine-day Exponential Moving Average (EMA), indicating a potential bullish shift in short-term momentum.

On the downside, the USD/CAD pair could revisit the six-month low of 1.3781, last touched on April 21. A clear break below this level would reinforce the bearish bias, potentially driving the pair toward the descending channel's lower boundary near the 1.3500 area, with additional support seen around 1.3419 -- its lowest point since February 2024.

The successful breach above the nine-day EMA of 1.3886 would improve the short-term price momentum and lead the USD/CAD pair to test the upper boundary of the descending channel near 1.3900. A breakout above this channel would signal a potential shift toward a bullish bias, paving the way for a move toward the 50-day EMA at 1.4123. Further gains could target the next major resistance at 1.4793 -- the lowest level observed since April 2003.

USD/CAD: Daily Chart