USD/CAD Continues Upward Trend

The USD/CAD pair is on a roll, marking its fifth day of gains, with current trading around 1.3910 during Asian trading hours on Tuesday. Analyzing the daily chart reveals that the price sits slightly above the upper trendline of a descending channel, which may suggest a bullish breakout is possible. However, until we get some solid confirmation, there’s a risk that this uptick might just be a false breakout, leading sellers to push prices back into the channel.

Currently, the USD/CAD is above the nine-day Exponential Moving Average (EMA), yet it’s encountering resistance from the 50-day EMA. This setup leaves the near-term sentiment somewhat neutral, albeit with a slight bullish inclination. The 14-day Relative Strength Index (RSI) is hovering around 54, indicating some recovering bullish momentum. Still, the closeness of the 50-day EMA implies that bulls need to see a clear daily close past this point to really gain traction.

As for immediate challenges, the USD/CAD pair is grappling with the 50-day EMA positioned at 1.3914. A sustained breach above this short-term average would bolster the bullish sentiment and could pave the way for the pair to venture toward its nearly 17-month high of 1.4248, a level not seen since June 24, 2026.

On the flip side, the first line of support is at the nine-day EMA, which stands at 1.3861. Should there be a pullback towards the descending channel, it could reignite a bearish trend, creating pressure on the USD/CAD to test the lower boundary of the channel at 1.3560, with potential further declines towards 1.3481, marking the lowest level observed since October 2024.