Just as NZD/CAD tests a key level of resistance, it’s worth considering its potential for a change of trend. Personally, I think the bearish trend on NZD/CAD has been one of the better ones for FX traders this year. Since failing to break a key resistance level in March, the commodity FX cross tumbled over 11% (or over 1000 pips) within a relatively clean downtrend.
Yet having tested the upper bounds of it bearish channel on the daily chart, NZD/CAD has approached an inflection point and there are compelling arguments for both bulls and bears to consider.
Bearish swing traders could take comfort in the following:
Contrarians (bulls in this instance) could take note of the following:
Given the importance of 0.8500 resistance, NZD/CAD could well turn lower over the near-term. Yet due to the strength of momentum leading into resistance, an eventual upside break is the bias whilst prices hold above the 0.8347/63 lows. Also take note of the rounding bottom forming which, if successful, projects an approximate target around 0.8770.
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