USD/CAD Price Forecast: Falls toward 1.3500; next support at lower boundary of the pattern

• The USD/CAD pair could potentially resume its upward movement as a falling wedge pattern suggests a bullish reversal signal.
• A break below the psychological 1.3500 level could lead the pair to test the lower boundary of the falling wedge.
• The immediate barrier appears at the nine-day EMA at 1.3557 level, aligned with the upper boundary of the falling wedge.

USD/CAD extends its losses for the second successive day, trading around 1.3510 during Tuesday’s European hours. Analysis of the daily chart suggests a continuation signal, as the falling wedge pattern is formed during an uptrend, implying that the upward price action would resume.

However, the 14-day Relative Strength Index (RSI) remains below the 50 level, indicating that the bearish trend is still in effect. A further decline toward the 40 mark would suggest an oversold condition for the USD/CAD pair, signaling the potential for an upward correction in the near future.

On the downside, the USD/CAD may navigate the region around the lower boundary of the falling wedge at 1.3470. A break below this level could strengthen the bearish bias and push the pair to test the six-month low of 1.3441 level, recorded on August 28.

Regarding the upside, the immediate barrier appears at the nine-day EMA at 1.3557 level, aligned with the upper boundary of the falling wedge. A breach above the falling wedge would weaken the bearish bias and lead the pair to the USD/CAD pair to test the "throwback support turns into a pullback resistance" level of 1.3590, followed by the psychological level of 1.3600.

USD/CAD: Daily Chart