USD/CAD Stays Subdued Below 100-Day EMA, Bearish Pressure Builds Around 1.3700

USD/CAD Forecast: Bearish Bias Prevails Below 100-Day EMA

The USD/CAD pair hovers near 1.3700 in early European trading on Friday, unable to break past the crucial 100-day Exponential Moving Average (EMA). The bearish structure remains intact, and technical indicators continue to flash red.

Technical Analysis: Resistance Dominates

• The pair remains rejected at the 100-day EMA, signaling persistent selling pressure.
• The 14-day Relative Strength Index (RSI) hovers below the 50 mark, around 45.0, confirming a bearish tilt.
• If bears push below initial support at 1.3660 (June 6 low), the next downside target lies at:
  • 1.3568 – Lower Bollinger Band boundary
  • 1.3430 – September 24, 2024 low

Fundamental Focus: USD Safe-Haven Role in Geopolitical Risk

• The US Dollar gains limited support as markets eye the potential for geopolitical escalation in the Middle East.
• President Trump is expected to decide in two weeks on potential military involvement, which could boost USD as a safe-haven if tensions rise.
• However, CAD is sensitive to oil prices, and any WTI recovery may cushion Canadian Dollar losses.

Outlook: Capped Recovery, Bearish Momentum Intact

Unless USD/CAD breaks decisively above 1.3746, the short-term bias remains to the downside. A sustained break below 1.3660 would confirm bearish continuation patterns, potentially exposing deeper supports into the 1.35 zone.

Related Reading on Tredu.com:

• WTI Crude Oil Outlook: Price Slips Below $73, Impacts CAD
• RSI & EMA Explained: Key Tools for Forex Traders
• What Drives USD/CAD? Oil, Interest Rates, and Trade