M5 entry on a great trend

What a trade great FVG and ob rejected daily high taken outThe Canadian Dollar (CAD) is little changed on the day and, with little domestic data of note out in the coming days, is likely to remain a bit of a sideshow for markets focusing more intently on developments elsewhere, Scotiabank’s chief FX strategist Shaun Osborne notes.

A test of 1.39 seems on its way
“Factors have moved unfavorably for the CAD in the past few weeks but trends may be stabilizing in the short run, which will help steady spot just below the recent peaks. A dovish-leaning Fed might be the CAD’s best hope for picking up some ground in the short run but if it is, it won’t be by much.”

“After the USD’s sustained rally over the past couple of weeks—culminating in eight consecutive daily gains through last Friday—the scope for further (immediate) CAD losses is limited in the very short run.”

“But the broader technical tone of the USD remains firm—momentum signals are aligned bullishly on the short-, medium– and long-term DMI studies. Now, USD/CAD pushes towards 1.39. Support is 1.3750/75.”