USD/CAD Price Forecast: Tests 1.3800 support after pulling back from nine-day EMA

• The USD/CAD pair could retest the barrier at the six-month low of 1.3781.
• The pair is testing the psychological level of 1.3800, followed by the six-month low of 1.3781.
• A break above the nine-day EMA of 1.3845 could improve the short-term price momentum.

The USD/CAD pair retraces its gains registered in the previous session, trading around 1.3810 during the early European hours on Friday. However, technical analysis on the daily chart suggests a potential bullish shift in market sentiment, as the pair attempts to break above the descending channel pattern.

Additionally, the 14-day Relative Strength Index (RSI) remains above the 30 mark, indicating a continued bearish bias, though not in oversold territory. Further price action will provide clearer trend direction. The USD/CAD pair also continues to trade below the nine-day Exponential Moving Average (EMA), signaling weak short-term momentum.

On the downside, the USD/CAD pair is testing the psychological level of 1.3800, followed by the six-month low of 1.3781, last touched on April 21, which is aligned with the upper boundary of the descending channel. A decisive return to the channel would revive the bearish bias and put the downward pressure on the pair to navigate the region around the 1.3419 -- its lowest point since February 2024, with additional support seen around the descending channel's lower boundary near the 1.33.50 area.

The USD/CAD pair may find an initial barrier at the nine-day EMA of 1.3845. A break above this crucial resistance zone would improve the short-term price momentum and would signal a shift toward a bullish bias, paving the way for a move toward the 50-day EMA at 1.4077, followed by a two-month high at 1.4415. Further gains could target the next major resistance at 1.4793 -- the lowest level observed since April 2003.

USD/CAD: Daily Chart