USD/CAD Price Forecast: Tests 1.4000 after breaking below 50-day EMA

USD/CAD extends its losses for the second successive day. trading around 1.4010 during the Asian hours on Monday. The technical analysis of the daily chart indicates the pair is moving downward within the descending channel, suggesting an ongoing bearish bias.

The USD/CAD is holding beneath both the 50-day Exponential Moving Average (EMA) and the shorter-term nine-day EMA, which keeps the pair in a mildly bearish near-term stance after its recent pullback from the highs.

The 14-day Relative Strength Index (RSI) has cooled to about 36, suggesting fading bullish momentum but not yet oversold conditions, which hints that sellers retain control while downside extension may still unfold in a more measured fashion.

The USD/CAD pair tests the lower boundary of the descending channel around 1.4000. A break below the channel would strengthen the bearish bias and put downward pressure on the pair to navigate the region around 1.3481, the lowest since October 2024.

On the upside, the USD/CAD pair may rebound toward the nine-day EMA of 1.4075, followed by the upper boundary of the descending channel around 1.4110. Further advances would cause the bullish emergence and support the currency cross to approach the 15-month high of 1.4248, reached on June 24.