USD/CAD edged higher on Monday, rebounding from losses in the previous session and trading around 1.4030 during European hours. Technical indicators suggest the potential for a bullish reversal, with the pair attempting to regain upward traction within an ascending channel pattern on the daily chart.
The near-term momentum appears constructive, as the pair remains positioned above the nine-day Exponential Moving Average (EMA). At the same time, the 14-day Relative Strength Index (RSI) holds comfortably above the 60 level, reinforcing the prospect of renewed bullish momentum.
Technical outlook: Key resistance at 1.4079, support near 1.4016
On the upside, a sustained recovery within the ascending channel would reinforce bullish sentiment, paving the way for a retest of the six-month high at 1.4079, last reached on October 14. A decisive break above this level could expose the next resistance zone near 1.4170, which aligns with the upper boundary of the channel.
Conversely, initial support is seen around the nine-day EMA at 1.4016. A clear move below this threshold could weaken short-term momentum and trigger a pullback toward the 50-day EMA near 1.3894. Further declines may extend toward the three-month low around 1.3721, where stronger buying interest could emerge.
