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USDCAD has turned south last week from around 1.1220 where we see signs of a completed wave (v) of 3 with an ending diagonal formation at the end of an extended move that typically confirms a bearish reversal.

As such, we suspect the pair is now moving down in a corrective black wave 4 that may reach the 1.0940 area that comes in around the 38.2% Fibonacci level near the former wave (iv).

Corrections are three wave patterns, so it looks like pair will stay sideways or bearish  for few more days. We see wave (b) now unfolding with wave (c) yet to come. We would be interested in longs once wave 4 will show us evidence of a completed set-back.

usdcad_feb_07_2014_4h