On December 3rd, NZD/CAD topped out while testing the 0.9160 high. After this price went down sharply and broke below the 50 Exponential Moving Average as well as the uptrend trendline. Probably this was the first indication that NZD/CAD is under selling pressure, which is highly likely to continue.
This is because, after the break below the trendline, the price corrected up and cleanly rejected the 0.9065 resistance level, which is 23.6% Fibs applied to the last wave up. There was one attempt to break above this resistance, although the daily closing price remained below, suggesting the validity of the downtrend.
Therefore, as long as the price remains below the recently printed high at 0.9075, the downtrend can be expected to begin, or at the very least, a correctional wave down. It might result in the price drop towards one of the Fibonacci support levels. This Fib was applied to the July - August correction down, which shows two key demand zones.
The first is at 0.8960, which is 88.6% Fibs. The second and most important support is located at 0.8915, which is confirmed by a 78.6% retracement level. It is also confirmed by 0% Fibs, which was applied to the trendline breakout point and symbolizes the final downside target based on that breakout.
All-in-all, the current trend seems to be bearish and there is a potential 100 pips downside move, which is likely to take place during the next 5-10 trading days. On the other hand, a break above the 0.9075 resistance will invalidate a bearish outlook, and in this case, NZD/CAD should be expected to produce a double top near 0.9160
Key support levels: 0.8960, 0.8915
Key resistance levels: 0.9040, 0.9065
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This is because, after the break below the trendline, the price corrected up and cleanly rejected the 0.9065 resistance level, which is 23.6% Fibs applied to the last wave up. There was one attempt to break above this resistance, although the daily closing price remained below, suggesting the validity of the downtrend.
Therefore, as long as the price remains below the recently printed high at 0.9075, the downtrend can be expected to begin, or at the very least, a correctional wave down. It might result in the price drop towards one of the Fibonacci support levels. This Fib was applied to the July - August correction down, which shows two key demand zones.
The first is at 0.8960, which is 88.6% Fibs. The second and most important support is located at 0.8915, which is confirmed by a 78.6% retracement level. It is also confirmed by 0% Fibs, which was applied to the trendline breakout point and symbolizes the final downside target based on that breakout.
All-in-all, the current trend seems to be bearish and there is a potential 100 pips downside move, which is likely to take place during the next 5-10 trading days. On the other hand, a break above the 0.9075 resistance will invalidate a bearish outlook, and in this case, NZD/CAD should be expected to produce a double top near 0.9160
Key support levels: 0.8960, 0.8915
Key resistance levels: 0.9040, 0.9065
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.