NZD/CAD traded lower on Monday, after hitting resistance at 0.8950 on Friday. Overall though, the pair continues to trade above the upside support line drawn from the low of May 15th, as well as above all three of our moving averages on the 4-hour chart. So, having these technical signs in mind, we would consider the short-term outlook to still be positive, even if the rate retreats somewhat more.
As we already noted, the current retreat may continue for a while more. However, the bulls may recharge from near the 0.8870 support, or near the aforementioned upside line and aim for another test near 0.8950. A decisive break above that barrier would confirm a forthcoming higher high and may open the way towards the 0.8990 zone, which provided resistance between April 26th and 30th, 2019. That said, for more upside extensions, we would like to see a strong break above the psychological round figure of 0.9000. Such a move could see scope for advances towards the 0.9055 hurdle, defined as a resistance by the high of April 16th, 2019.
Shifting attention to our short-term oscillators, we see that the RSI retreated towards its 50 line, despite ticking up at the time of writing, while the MACD, although positive, lies below its trigger line, pointing down. Both indicators detect slowing upside speed and support the notion for some further setback before the bulls decide to pull the trigger again.
On the downside, we would like to see a decisive dip below 0.8820 before we start examining the case for a short-term bearish reversal. The rate would be already below the pre-discussed upside line and may dive towards the lows of June 30th and July 1st, at 0.8745. Another break, below 0.8745, may carry more bearish implications, perhaps targeting the low of June 22nd, at 0.8700.
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