The US dollar is showing a weak downward trend in the USD/CAD pair, expanding on the "bearish" momentum of the previous session, when the instrument retreated from the local highs of December 5. As before, pressure on quotes is being exerted by expectations of further steps by financial authorities regarding adjustments to monetary parameters. 

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.