The USD/CAD currency pair is experiencing a bearish trend, with prices falling below the 9-day Exponential Moving Average (EMA) and trading around 1.3590. This downward movement is supported by the pair's position within a descending channel pattern, indicating a persistent bearish bias. The 14-day Relative Strength Index (RSI) near 37 further reinforces the selling pressure, suggesting that the pair may continue to decline.
On the downside, the immediate support level is at 1.3473, the lowest since September 2024. If prices break below this level, the next significant support is at the lower boundary of the descending channel, around 1.3410. Conversely, the immediate resistance is at the 9-day EMA of 1.3630, followed by the upper descending channel boundary at 1.3650.
A sustained break above the 1.3650 resistance zone could shift the sentiment to bullish, with the 50-day EMA at 1.3715 as the next target. Further advances could lead to a test of the five-month high of 1.3967, reached on March 31. However, the current technical analysis suggests that the bearish trend is likely to persist in the near term.
The Canadian Dollar (CAD) has shown mixed performance against other major currencies. While it was the strongest against the US Dollar, it has also shown weakness against the Euro, British Pound, Japanese Yen, Australian Dollar, and New Zealand Dollar. The Swiss Franc has also outperformed the CAD.
The technical analysis of the USD/CAD pair highlights the importance of the EMA and RSI indicators in identifying potential turning points. The descending channel pattern and the RSI near 37 suggest that the bearish trend is likely to continue, at least in the short term. Investors should closely monitor these technical indicators to make informed trading decisions.
In my opinion, the USD/CAD pair is likely to remain in a bearish trend for the foreseeable future, with the 1.3410 support level being a critical area to watch. The market's sentiment and the performance of other major currencies will also play a significant role in shaping the pair's trajectory.
