NZD/CAD traded higher yesterday, after it hit support at 0.8725, and continued to do so today as well. However, the bigger picture reveals a price structure of lower highs and lower lows below a downside resistance line taken from the high of September 20th. Therefore, we would consider the short-term outlook to be negative.
Even if the current bounce continues for a while more, we see decent chances for the bears to jump back into the action from near the 0.8800 barrier, marked by the inside swing low of September 28th, or from near the aforementioned downside line. The forthcoming negative wave may result in another test near 0.8725, the break of which could pave the way towards the 0.8680 territory, marked by the lows of August 17th and 18th. Another break, below 0.8725, could extend the downtrend towards the low of July 2nd, at 0.8630.
Taking a look at our short-term oscillators, we see that the RSI rebounded back above its 30 line, while the MACD, although negative, turned up and moved above its trigger line. Both indicators detect slowing downside momentum and add to the view that some further recovery may be in the works before the next leg south.
In order to start examining a bullish reversal, we would like to see the rebound extending above the 0.8838 level, marked an intraday swing high formed on Tuesday. This may confirm the break above the downside resistance line taken from the high of September 20th, and cold initially pave the way towards Monday’s high, at 0.8880, or the inside swing low of last Thursday, at 0.8905. If neither zone is able to halt the advance, then we could see the bulls extending their march towards the high of September 23rd, at 0.8975.
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. 73.90% 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 2021 JFD Group Ltd.