USD/CAD Price Analysis: Breakdown of rising channel below 1.3750 warrants sheer downside

• A downside break of the rising channel has triggered a bearish reversal.
• Edging down from the 50-and 200-EMA is indicating more weakness ahead.
• The RSI (14) has shifted into the bearish range of 20.00-40.00 like a cakewalk.

The USD/CAD pair is hovering around the multi-tested support of 1.3150 in the early Asian session. Upbeat market sentiment has resulted in a significant decline in the asset from the round-level resistance of 1.3900 on Monday. The US dollar index (DXY) has shifted into an inventory adjustment phase and may surrender the critical support of 112.00.

On an hourly scale, the asset has delivered a south-side break of the Rising Channel chart pattern that indicates a bearish reversal. The upper portion of the above-mentioned chart pattern is placed from September high at 1.3838 while the lower portion is plotted from October 5 low at 1.3504.

The major has dropped below the 50-and 200-period Exponential Moving Averages (EMAs) at 1.3784 and 1.3758 respectively, which adds to the downside filters.

Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which signals that the downside momentum has been triggered.

Should the asset drops below the round-level support of 1.3700, the Canadian bulls will drag the asset toward October 6 low at 1.3565. A breakdown of the latter will bring further weakness in the asset towards October 5 low at 1.3504.

On the contrary, the greenback bulls could regain their glory if the asset oversteps the round-level hurdle of 1.3800. An occurrence of the same will drive the asset towards Friday’s high at 1.3898, followed by Thursday’s high at 1.3978.

USD/CAD hourly chart