NZD/CAD traded lower on Friday, after hitting resistance near the 0.8640 barrier. That said, today, the pair rebounded somewhat, even before hitting Thursday’s low of 0.8575. Overall, NZD/CAD continues to trade below the downtrend line drawn from the high of July 31st, and thus, we would consider the short-term outlook to still be negative, despite the likelihood of some further recovery.
If any further recovery stays limited near the 0.8640 barrier, or near the aforementioned downtrend line, we would expect the bears to pull the trigger for another test near the 0.8575 zone. If they don’t stop there, a break lower would confirm a forthcoming lower low and may set the stage for larger bearish extensions, perhaps towards the 0.8480 zone, marked as a support by the lows of May 27th and June 2nd.
Shifting attention to our short-term oscillators, we see that the RSI lies below 50, but points up, while the MACD, although negative, stands above its trigger line, pointing up as well. Both indicators detect slowing downside momentum, which supports the notion for some further recovery before the next bearish leg.
In order to start examining the bullish case, we would like to see a strong rebound above the 0.8690 level. The rate would already be above the short-term downtrend line, which may encourage the bulls to push for Wednesday’s high, at around 0.8745. Another break, above 0.8745, may extend the advance towards the 0.8785 hurdle, defined as a resistance by the inside swing low of August 10th.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.25% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.