USDCAD decline shows signs of slowdown ahead of technical correction

As of August 6, 2025, the USDCAD currency pair opened at the 1.37726 level amid selling pressure. This week's price decline has been more moderate compared to previous sessions. The pace of the pair’s depreciation has slowed noticeably in recent days. This is confirmed by the shortened candle shadow and relatively short body of the pattern, which indicate a struggle between buyers and sellers.

The short-term EMA(20) sits at 1.37410, while the long-term EMA(50) holds at 1.37650. The latter remains above the former, which theoretically signals a downtrend. However, both lines suggest a clear slowdown in the decline. The EMA(50), which used to be ahead of the EMA(20), is now falling more gradually, and the gap between the lines is shrinking—a classic sign of a probable near-term crossover.

The Stochastic Oscillator (5, 3, 3, Simple) confirms an imminent increase. The %K and %D lines are at the levels of 23 and 47, respectively. So, they are both located below the 50 area, indicating neutral-to-bearish conditions. The wide divergence between %K and %D suggests the current correction may extend, with a high probability of further decline. However, as the lines approach oversold territory, this may signal waning selling pressure and a potential technical rebound. The Stochastic's current position combined with the slowing EMA momentum presents a compelling case for a short-term correction followed by the USDCAD growth.

The On-Balance Volume (OBV) indicator is at 2,280,000. It shows a slowing downtrend. Further volume dynamics should be monitored. If these volumes don’t confirm a continued rise, the price could easily return to its key support level near 1.35690.

In total, all three indicators form a common signal that sellers' momentum is exhausted. The chances of USDCAD growth resumption in the coming days, up to August 13, 2025, are increasing.

At present, the optimal trading strategy is to wait for confirmation: either EMA crossover, OBV growth, or Stochastic Oscillator reversal. If the signal is received, buying USDCAD with Take Profit at 1.38430 and Stop Loss at 1.37244 is recommended.

The strategy is valid from August 6 to August 13, 2025.