Usdcad tests 9-day ema near 1.3900 resistance, potential for pullback

The USDCAD pair is showing signs of strength for the second consecutive day, as it trades around 1.3890 during the European session on Monday. While this may be seen as a positive development, technical analysis on the daily chart suggests a cautious approach. The pair is currently following a downward trend, as indicated by a clearly defined descending channel.The recent gains in the USDCAD pair could be attributed to a weaker Canadian dollar, as the US dollar has been relatively stable. However, the overall trend remains bearish, and traders should exercise caution before making any significant moves.On the daily chart, the pair has been consistently moving lower within the descending channel, with each attempt to break out of the pattern resulting in a sharp decline. This indicates that the bears are firmly in control and any upside movements should be viewed with skepticism.Furthermore, the 200-day moving average is also acting as a strong resistance level, further supporting the bearish bias. The pair has failed to break above this key level in recent weeks, adding to the overall bearish sentiment.In terms of economic data, the US and Canada have both been releasing mixed figures, making it difficult to determine a clear direction for the pair. While the US economy has shown signs of recovery, concerns over the ongoing trade tensions with China continue to weigh on investor sentiment. On the other hand, the Canadian economy has been impacted by the decline in oil prices and the ongoing NAFTA negotiations.In the short term, the USDCAD pair may continue to trade within the descending channel, with support seen around the 1.3850 level. A break below this level could open the door for further downside towards the 1.3800 level.On the upside, the 1.3950 level remains a key resistance, followed by the 1.4000 psychological level. However, any significant gains are likely to be limited, as the overall trend remains bearish.In conclusion, while the USDCAD pair has shown some strength in recent days, the prevailing bearish trend and technical indicators suggest a cautious approach. Traders should closely monitor the descending channel and key resistance levels for potential trading opportunities, while keeping an eye on any developments in the US-China trade negotiations and NAFTA talks