What goes up must come down—and USDCAD is living proof of this old adage. The pair is currently feeling the heat, sliding relentlessly after a protracted uptrend that hit a wall in late June. The price is testing the support zone around the 50-day exponential moving average (EMA50), confirming that the winds have shifted decisively in favor of sellers.
The technicals paint a bearish picture. The 20-day EMA has rolled over and is now sitting above the market—a textbook red flag. The 50-day line is still tilted slightly upward, yet it has lost momentum and flattened out. Meanwhile, the 100-day EMA lags far below. With quotes stuck in the narrowing gap between the EMA20 (1.41310) and the EMA50 (1.40115), this convergence is a classic sign of an impending trend reversal—from up to down, or at least a flat grind. A decisive close below the 50-day line could pave the way to the 100-day one, which sits at 1.39160.
The Relative Strength Index (RSI) has cratered to 19, deep in oversold territory, underscoring the ferocity of the sell-off. However, such extreme readings rarely persist without a brief pause, leaving the door open for a technical rebound or a short consolidation. But make no mistake: bears are still running the show.
The Chaikin Oscillator reinforces the gloomy outlook. It has been steadily sliding from its late-June highs and is now in the negative zone, which is proof that selling is backed by real volume, not just noise. This makes a meaningful reversal in the coming days unlikely. Any short-lived bounces, if they come, will probably be met with new bearish pressure.
On the fundamental front, the dollar's shine has dulled. Soft American inflation data from June has dented interest rate hike expectations, narrowing the yield advantage over the loonie. Meanwhile, rising oil prices—fueled by the US‑Iran conflict—are giving the Canadian dollar an extra leg up. That said, safe‑haven demand for the greenback and the upcoming Bank of Canada (BoC) monetary decision remain wild cards that could still throw a wrench in the works of the current trend.
For those looking to make a move, here is the trading plan:
Sell USDCAD on a corrective rebound to 1.40950. Place Take Profit at 1.39200. Set Stop Loss at 1.41800.
This forecast holds true from July 15 till July 23, 2026.
This content is for informational purposes only and is not intended to be investing advice.
