USD/CAD Price Forecast: Falls toward 1.3800 after retreating from levels near nine-day EMA

• USD/CAD may find support near the 1.3800 level.
• The 14-day RSI hovers just above 30, indicating sustained bearish momentum.
• Initial resistance is seen at the nine-day EMA around 1.3837.

The USD/CAD pair is retracing its recent gains from the previous session, trading around 1.3820 during the European hours on Tuesday. The daily chart's technical analysis suggested a sustained bearish sentiment, as the pair continues to trade within a descending channel pattern.

Additionally, the 14-day Relative Strength Index (RSI) remains just above 30, indicating continued bearish pressure while avoiding oversold conditions. The USD/CAD pair is also trading below the nine-day Exponential Moving Average (EMA), pointing to weak short-term momentum. Further price movement is required to confirm the prevailing trend direction.

On the downside, the USD/CAD pair may retest the key psychological support at 1.3800, followed by the seven-month low of 1.3760, last seen on May 2, which sits just above the lower boundary of the descending channel around 1.3750.

A clear break below the channel would strengthen the bearish bias, potentially driving the USD/CAD pair toward the 1.3419 level -- its lowest since February 2024 -- with further support near the lower boundary of the channel around the 1.3320 area.

The USD/CAD pair encounters initial resistance at the nine-day EMA of 1.3837, with the next barrier at the upper edge of the descending channel near 1.3870. A clear breakout above this key resistance zone could reinforce short-term bullish momentum and indicate a potential shift in market bias. Such a move may pave the way toward the 50-day EMA at 1.4058, followed by the monthly high at 1.4415.

USD/CAD: Daily Chart