USDCAD seems to be forming a large bullish impulse wave Ⓒ, which is based on five intermediate sub-waves (1)-(2)-(3)-(4)-(5).
The current structure suggests that we are in a corrective wave (4) and perhaps this wave has not yet completed its pattern.
Its formation is a flat that consists of minor sub-waves A-B-C. A and B are fully completed, whereas C is still under construction.
In the short term, there could be a slight decline in impulse C to the 1.4147 area, i.e. to the level of the previous minimum, which was formed by wave A. Then, growth is expected to 1.4646 and higher, since wave (5) is rarely truncated according to statistics.
Let’s look at an alternative scenario. Given that the fourth waves are very often long horizontal patterns, then intermediate wave (4) can take the form of a contracting horizontal triangle.
If this assumption is correct, the triangle will include five sub-waves A-B-C-D-E. After the completion of the corrective wave (4) near the level of 1.4258, we could see the market rise in impulse (5) above 1.4649.
It should be taken into account that in this scenario, we will see a sideways movement of the price over the next few trading days. Perhaps until the end of the trading week.
It is preferable to add this pair on our watchlist!