The USD/CAD pair is attempting a modest rebound early Monday, trading around 1.3690 during the European session after two consecutive days of losses. Despite the uptick, overall sentiment remains bearish, as technical indicators continue to favor downside pressure.
On the daily chart, USD/CAD remains confined within a descending channel pattern—suggesting a broader bearish trend. The 14-day Relative Strength Index (RSI) is still positioned below the neutral 50 level, signaling continued selling interest. Additionally, the pair is trading below the nine-day Exponential Moving Average (EMA), pointing to weakened short-term momentum.
Key Support Levels in Focus
If downside pressure resumes, immediate support lies at the nine-month low of 1.3539. A decisive break below this level could further cement the bearish outlook and expose the pair to the next key support at 1.3419—its lowest level since February 2024. Continued selling could eventually drive the pair toward the psychological level of 1.3300, which coincides with the lower boundary of the descending channel.
Resistance Levels to Watch
On the upside, USD/CAD is currently testing resistance at the nine-day EMA, positioned near 1.3697. A sustained move above this level could bring the 50-day EMA at 1.3742 into play—an area also aligned with the upper boundary of the descending channel. A confirmed breakout above this critical resistance zone would signal a shift in momentum and potentially open the door for a rally toward the three-month high of 1.4016, last seen on May 13.
Outlook
While Monday’s recovery shows early signs of buyer interest, the broader technical setup still favors a bearish outlook unless the pair decisively breaks above key moving averages and the channel resistance. Until then, traders are likely to remain cautious, with a close eye on both technical levels and broader macroeconomic catalysts.
