USD/CAD Price Forecast: Moves Above 1.3800 Ahead Of Upper Boundary Of Ascending Channel

By Akhtar Faruqui of FX Street

Forex Analyst • Oct 15, 2024 at 4:41 AM EDT

The USD/CAD pair may find the barrier around the upper boundary of the ascending channel at the 1.3870 level. The 14-day RSI signals an overbought condition, suggesting that a potential downward correction could be on the horizon.

USD/CAD continues its upward momentum, extending the rally that began on October 2, trading near 1.3810 during early European hours on Tuesday. The daily chart shows the pair is trending higher within an ascending channel, reinforcing a bullish outlook.

However, the 14-day Relative Strength Index (RSI) is above 70, signaling overbought conditions and suggesting a possible downward correction in the near future.

On the upside, USD/CAD could test the upper boundary of the ascending channel near the 1.3870 level. A break above this point may further boost bullish sentiment, potentially driving the pair toward 1.3946, the highest level since October 2022.

In terms of the downside, USD/CAD may find initial support at the lower boundary of the ascending channel, near the 1.3770 level. A break below this could dampen the bullish sentiment, potentially pushing the pair toward its nine-day Exponential Moving Average (EMA) at 1.3706.

Additional support is seen at the former pullback resistance, now acting as throwback support, around the 1.3620 level, followed by the psychological threshold of 1.3600.

USD/CAD: Daily Chart

(Click on image to enlarge)

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