During the Asian session, the USD/CAD pair is correcting in the area of 1.3872. The Canadian dollar is holding in a neutral range amid no changes in key macroeconomic data at the start of the new year.

This week, the USD/CAD pair strengthened by about 1.0% under the influence of positive US data and expectations of deteriorating conditions in the Canadian labor market.

The probability of decline remains.

On the daily chart, a downward correction is developing as the second wave of a higher level (2), in which wave A of (2) and a correction as wave B of (2) are completed, and wave C of (2) is also observed. On the four-hour time frame, the first entry wave of the lower level i of C has already appeared and the correction as wave ii of C is nearing completion. If the assumption is correct, the downward trend of the USD/CAD pair will continue to the area of 1.3550–1.3395, and the critical stop-loss level for this scenario will be 1.3947.

At the end of last month, the USD/CAD pair was actively increasing in value, correcting the medium-term downward trend: the price reversed from the lower boundary of the main Murrey trading range of 1.3671 (Murrey level [0/8]) and is currently close to the level of 1.3855 (Murrey level [3/8]), supported by the upper boundary of Bollinger Bands, the break of which will ensure further growth to the targets of 1.3977 (Murrey level [5/8]), 1.4038 (Murrey level [6/8]), 1.4160 (Murrey level [8/8]).

On the four-hour chart, candlestick patterns give conflicting signals. Thus, below the level of 1.3727, one can identify the construction of a Hammer formation, which indicates an area of low prices and warns market participants about a change in trend, whereas after reaching the level of 1.3747, the Tweezers Top and Long-Legged Doji patterns formed, which is a signal of increased sales and a probable downward reversal at local peaks.