• USD/CAD may target the initial resistance at the upper boundary of the ascending channel around 1.3970.
• The 14-day Relative Strength Index at 60 signals bullish momentum without overbought conditions.
• Initial support is seen at the nine-day EMA near 1.3864, followed by the 50-day EMA at 1.3853.

USD/CAD inches lower after three days of gains, trading around 1.3890 during the European hours on Friday. The technical analysis of the daily chart shows the pair remains within an ascending channel pattern, suggesting a persistent bullish bias. The 14-day Relative Strength Index (RSI) at 60 is bullish and not overbought. RSI above the 50 midline keeps dips shallow.

The nine-day Exponential Moving Average (EMA) has turned higher and now stands above the 50-day EMA, with price holding over both, keeping a topside bias. The 50-day EMA is flattening after a prolonged decline, indicating diminishing downside pressure.

As long as the USD/CAD pair holds above the short-term averages, the bias would remain for tests of overhead resistance at the upper boundary of the ascending channel around 1.3970, followed by the seven-week high of 1.4014, reached on December 2.

Pullbacks would find initial support at the rising nine-day EMA of 1.3864 and at the 50-day EMA at 1.3853. A drop below moving averages would slow the advance and shift risk toward the lower ascending channel boundary around 1.3790. A break below the channel would weaken the bullish bias and put downward pressure on the USD/CAD pair to test the five-month low of 1.3642, recorded on December 26.

(The technical analysis of this story was written with the help of an AI tool.)