NZD/CAD traded higher overnight, but during the European morning, it hit resistance slightly below the 0.8360 barrier, marked by the high of May 5th, and then, it pulled back. However, it stayed above the upside line taken from the low of May 19th, and thus, we will consider the short-term outlook to be cautiously positive.
The bulls may take charge again from near that upside line and aim for another test near 0.8360. If they break higher, we could see them pushing all the way up to the 0.8455 territory, defined as a resistance by the high of April 27th. If they are not willing to stop there either, then we may see them pushing towards the peak of April 20th, at around 0.8530.
Taking a look at our short-term oscillators, we see that the RSI turned down and exited its above-70 zone, but the MACD, although it turned down as well, it remains above both its zero and trigger lines. Both of them detect slowing upside speed, but the fact that the MACD remains above both its zero and trigger lines, keeps alive the case of a potential rebound soon.
In order to start examining whether the bears have stolen all the bulls’ swords, we would like to see a clear dip below 0.8223. This could confirm the break below the short-term upside line and may initially target the low of May 20th, at 0.8165. If that barrier doesn’t hold, then its break could set the stage for more declines, perhaps towards the low of May 19th, at 0.8100, or the low of May 16th, at 0.8070.
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