Last week, the New Zealand dollar showed good performance against its Canadian counterpart, closing the week well in the positive territory. By looking at the 4-hour chart of NZD/CAD, we can see that the pair has broken the upper bound of the wide range between the 0.8910 and 0.9120 levels, where it was trading in since the first days of January. Also, the up-move is supported by a steep short-term upside support line drawn from the low of February 28th. As long as the rate remains above that upside line and above the upper bound of the above-discussed range, we will continue targeting higher areas.
A push further north may drag NZD/CAD towards the 0.9165 barrier, which held the rate down between December 21st and 31st. If that barrier holds the pair down this time as well, we might see a small correction. But if the steep upside line remains intact, this could be an opportunity for the bulls to re-enter the game. A strong push higher and a break above the 0.9165 resistance could invite even more buyers into the action and lift the rate to its next potential area of resistance at 0.9190, marked by the high of December 13th.
Looking at our oscillators, the RSI and the MACD, both support the notion of seeing a further up-rise. The RSI is above 50 and points to the upside. The MACD is just fractionally above its trigger line but sits well in the positive territory and also points to the upside.
Alternatively, a break below the aforementioned steep upside line and a drop below the upper bound of the range, at 0.9120, could spook the bulls from the field in favor of the bears. This might open the door to the 0.9106 obstacle, a break of which could lead NZD/CAD towards the 0.9075 hurdle, marked by the low of March 7th.
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