USD/CAD Price Forecast: Tests initial support near 1.3950, followed by nine-day EMA

• USD/CAD may test primary support at the eight-week low at 1.3674.
• The 14-day RSI remains above 30, indicating continued bearish bias.
• The primary resistance appears at the nine-day EMA of 1.3764.

The USD/CAD pair is retracing its recent gains registered in the previous session, trading around 1.3710 during the European hours on Wednesday. The daily chart's technical analysis suggested a persistent bearish sentiment, as the pair consolidates within the descending channel pattern.

The 14-day Relative Strength Index (RSI) consolidates above 30, indicating continued bearish pressure. A break below the 30 mark would indicate an oversold situation and a potential upward correction soon. Additionally, the USD/CAD pair is also remaining below the nine-day Exponential Moving Average (EMA), pointing to weaker short-term momentum.

The USD/CAD pair may find initial support near the eight-week low at 1.3674, which was recorded on June 2, followed by the lower boundary of the descending channel around 1.3650. A break below the channel would reinforce the bearish bias and put downward pressure on the pair to navigate the region around 1.3419, the lowest since February 2024.

On the upside, the USD/CAD pair may encounter primary resistance at the nine-day EMA of 1.3764. A break above this level could improve the short-term price momentum and support the pair to explore the area around the 50-day EMA at 1.3933, followed by the descending channel's upper boundary around 1.3960.

A surpassing of the above-mentioned crucial resistance zone could cause the emergence of the bullish bias, driven by the improved medium-term price momentum, and support the pair to approach the eight-week high of 1.4016, which was reached on May 13.

USD/CAD: Daily Chart