USD/CAD Price Forecast: Eyes upper rectangle boundary after breaking above 1.4000

• USD/CAD may target the upper boundary of the rectangle around 1.4060.
• The 14-day Relative Strength Index remains above 50, signaling an active bullish bias.
• The pair may find its initial support at the psychological level of 1.4000.

USD/CAD gains ground for the third successive session, trading around 1.4020 during the European hours on Monday. The technical analysis of the daily chart indicates a price consolidation, with the pair moving sideways within a rectangle pattern.

The short-term price momentum is stronger as the pair remains above the nine-day Exponential Moving Average (EMA). Additionally, the 14-day Relative Strength Index (RSI) is positioned above the 50 level, indicating a bullish bias is active.

On the upside, the USD/CAD pair may target the upper boundary of the rectangle around 1.4060, followed by the seven-month high of 1.4079, reached on October 14. A break above this confluence resistance zone would lead the pair to test the psychological level of 1.4100.

The primary support lies at the crucial level of 1.4000, followed by the nine-day EMA of 1.3994. Further declines below the latter would weaken the short-term price momentum and prompt the USD/CAD pair to test the rectangle's lower boundary around 1.3930, aligned with the 50-day EMA at 1.3926.

A break below the confluence support area would cause the emergence of the bearish bias and open the doors for the USD/CAD pair to navigate the region around the "throwback support" near the four-month low of 1.3721, which was recorded on August 7.

USD/CAD: Daily Chart