USD/CAD Price Forecast: Could test 1.4200 barrier near nine-day EMA

• USD/CAD trades within a falling wedge pattern, a bullish formation that indicates a potential breakout to the upside.
• The pair could find immediate support around the falling wedge’s upper boundary at 1.4100.
• The immediate resistance zone appears near the nine-day EMA at 1.4230, aligned with the upper boundary of the falling wedge.

The USD/CAD pair gives up its recent gains from the previous session, trading near 1.4180 during Asian hours on Wednesday. Technical analysis on the daily chart suggests a falling wedge pattern, a bullish formation that suggests a potential breakout to the upside.

Additionally, the 14-day Relative Strength Index (RSI) remains above the 30 level, supporting the current bearish outlook. However, a decline below 30 would indicate oversold conditions for the USD/CAD pair, potentially hinting at an upcoming upward correction.

However, the USD/CAD pair remains below the nine- and 14-day Exponential Moving Averages (EMAs), indicating persistent bearish sentiment and weak short-term price action. This positioning suggests continued selling pressure.

On the downside, the USD/CAD pair may find immediate support at the lower boundary of the falling wedge, aligning with the psychological level of 1.4100. A break below this channel would strengthen the bearish bias, potentially driving the pair toward the three-month low of 1.3927, last reached on November 25.

The USD/CAD pair may encounter immediate resistance near the nine-day EMA at 1.4230, which aligns with the upper boundary of the falling wedge. A further hurdle is seen at the 14-day EMA of 1.4263. A breakout above this key resistance zone could shift the bias to bullish, potentially driving the pair toward the psychological level of 1.4300.

USD/CAD: Daily Chart