The first Monday in July started off positively with indices heading higher. This could have been triggered by traders’ good mood following the US Independence Day, or optimism over the COVID pandemic, perhaps it’s the freshly printed US dollars from the Federal Reserve, flooding the market. Instead of focusing on what has happened, let’s focus on what will probably happen next.
Let’s start with the SP500, on Monday it broke a crucial mid-term resistance on the 3155 point. This resistance has held its own since mid-June, buyers tried to break it a few times but failed, which makes it a significant level. This area was broken during the Asian session and the price remained above it during the European and American hours. The SP500 tested the broken resistance as a close support during the beginning of the European session on Tuesday. It’s crucial to hold the price above this support level to get a mid-term buy signal. Otherwise, we may experience a false bullish breakout pattern, which may be pretty unpleasant for demand.
Moving on the NZDUSD, the price of the pair is currently correcting the bullish movement that happened after the defense of the 0.639 support level and the breakout of the dynamic down trendline. Here, the price is also testing the broken horizontal resistance as a close support, which can work out for sellers.
Meanwhile the NZDCAD’s price is bouncing from the major down trendline on the weekly chart. As long as the price stays below the trendline, sentiment is negative. More will be revealed on Friday when we can view the shape of the weekly candle. Anything with a bearish body, will be considered a sell signal.
Unemployment rate rose, which is bad but the Unemployment change was higher than expected. That was an information, which could have been perceived as a positive one. Despite that, AUD dropped, why? The reason for that was that this data was only partially good as most of those gains were coming from the part-time jobs. Those numbers increased the chances for a further rate cut in Australia, which is negatively affecting local currency.
First, we will show You the AUDUSD, where the bearish flag is a fact. The price broke its lower line and went down. The latest development here is the price successfully testing 0.694 as a resistance. That is a confirmation of a negative sentiment, that we mentioned yesterday.
Negative sentiment can be also seen on the AUDJPY, where instead of the double bottom formation and an upswing, the price created the pennant resulting in a downswing. Sell signal is ON.
Few words about the NZDCAD, which was on our radar for a long time. After heave drop, the correction time came and the price created the flag formation (red lines). This kind of patter, as you know, should bring us a further decline but the sell signal will be created, when the price will break its lower line.
FX is pretty quiet today too but we have few setups that you may find interesting.
First one is Gold, which most recently found and confirmed the most important horizontal support – 1270 USD/oz. As long as we stay above this line, the sentiment seems positive and we are still playing the correction scenario, not the reversal one. The real buy signal will be triggered, when the price will break two black dynamic resistances.
Oil – the second most popular commodity among FX traders is in a slightly worse situation than Gold. Here, we also have a price bouncing from a support but the thing is that the bearish momentum looks pretty strong here. Last week was catastrophic for Crude and it seems that this is not the end of bullish troubles.
Now something more exotic but very technical – NZDCAD. The sell signal from march was a proper one. We had a bearish engulfing pattern together with a false breakout. The price dropped creating a legitimate downtrend. Most recently, we do have a bullish correction, which is aiming for the long-term horizontal resistance. Chances that we will get there are pretty high, especially that in the same time, this is a 38,2% Fibonacci. Sentiment is still negative.
Usually, when AUD jumps, we have a similar movement on the NZD. This time is a bit different. NZD is not following this path. Actually, on NZDCAD we do see a very good, long-term sell signal.
NZDCAD is one of my favorite pairs in the group of trading occasions for weeks or even months. Here, we are going down driven by the bearish engulfing on the weekly chart along with the double top formation and the false breakout above the down trendline. About the double top formation…most recently, we broke the neckline of this pattern and tested that as the closest resistance. That takes away all the arguments from the bulls and opens us a way towards the lows from October. That gives us an opportunity for 550 pips trade. Sweet, isn’t it?
Next one is Gold, which is using this risk-off mode on the market that we see right now. The price is making a double bottom formation at the end of a wedge pattern. That can be a good start for an upswing. The buy signal will be triggered when the price will close above the upper red line.
A very similar setup can be found on the USDRUB. Actually here, you have an example, what can or should happen to gold in the future. USDRUB already broke the upper line of the wedge, using the double bottom formation. The buy signal is ON and we should see a further rise.
On most of the assets that does not change the long-term situation but on some, it may be a start of a bigger reversal, which may be continued for the next few weeks.
As an example of the second group I give You Gold. The price created the double bottom formation and is now trying to break the neckline of this pattern. What is great here is that this neckline is in the same time the neckline of the much bigger head and shoulders formation and is in the same area as the lower line of the symmetric triangle. Those two were previously strong supports and now, play role of a crucial resistance. Price closing a week above the blue and black lines will give us a proper buy signal.
USDCHF stopped the surge and it seems that is ready for a bearish correction. The aim for the correction is on the green and black line – horizontal and dynamic support respectively. Sentiment here is still ultra-positive.
Last instrument is the NZDCAD, where the price is creating a strong bullish weekly candle – hammer. This candle is being drawn on the neckline of the double top formation, which my stop the bearish plan, at least for a while. The sentiment is still negative but the major sell signal will be triggered, when the price will break the lows of the hammer candle. As long as we are above, the bullish correction is the most favorable scenario.
Hello Friday! Be or not to be for many trading signals as today we are about to finish another weekly candle. There are some instruments, were the last week’s candle brought us a proper signal and in this week it is all about the confirmation. An example of that one is NZDCAD and that will be the first instrument in our short review.
This week was all about the confirmation of that long-term sell signal and most probably (as the day did not finish), sellers did a great job as we are about to close this week on new lows. That kind of price action can be considered as bearish and that is our view on this instrument.
Next one is gold, which finally reached our target – neckline of the head and shoulder pattern. Contact was positive for sellers as the price draw a nice hammer on the daily chart. As long as we stay above the neckline there is no sell signal. Actually, with that yesterday’s bounce, we may say that the sentiment is bullish.
Last one is the USDCHF, where we have a very nice bearish setup. Setup not signal though! For the signal we need to see a breakout of the lower line of the flag. What is interesting here is that the price is approaching a combination of 4 crucial resistances. If that is not a good place for a bounce than I do not know what is.
Charts are full of sudden and unexpected changes of the direction, boring sideways trends and false breakouts. As an example, I do have AUDUSD, where first, the price went down due to the dovish RBA and most recently, went higher thanks to the good retail sales data and the positive rumors about the agreement between the US and China – Australia’s biggest trading partner.
Technically, the movement is rather typical: false bearish breakout of crucial support brings us a strong upswing. The price is now testing the dynamic mid-term resistance. Breakout of that red line will bring us a nice buy signal.
Next instrument is NZDCAD. Today’s rises here are correlated with the strength of the AUD but also it is a take profit action from the recent significant drop. Rising prices create a great selling opportunity. The sell signal is still pretty strong and what you are getting now are the higher prices, which can significantly improve the risk to reward ratio of the short position.
The last one is the Bitcoin. After the rocket upswing that we witnessed yesterday, we have a time to relax right now. The sentiment is still super positive and the target for this upswing is around the psychological barrier of 6000 USD.
The New Zealand Dollar tumbled across the board during the early parts of Tuesday morning after the Reserve Bank of New Zealand’s (RBNZ) dovish shift caught markets by surprise.
With the central bank abandoning its long-standing neutral stance on interest rates and signalling a possible cut, the New Zealand Dollar is likely to weaken further. This is already being reflected in the NZDUSD which dropped a staggering 100+ pips in a matter of minutes following the RBNZ’s dovish statement. Focusing on the technical picture, the currency pair is turning bearish on the daily charts with prices trading marginally below 0.6810 higher low as of writing. Sustained weakness below this level will signal further downside with the next key point of interest at 0.6750. Alternatively, if 0.6810 proves to be reliable support, prices have the potential to rebound back towards 0.6850 before resuming the downtrend.
NZDJPY knocks on 75.00’s door
The NZDJPY collapsed roughly 110 pips following the RBNZ’s dovish shift to trade around 75.00 as of writing. Prices are looking increasingly bearish on the daily charts with a breakdown below 75.00 opening a path towards 74.30. On the other hand, a rebound from 75.00 could send the NZDJPY back to 75.40.
EURNZD pushes above 1.6550
We see weakness in the New Zealand Dollar pushing the EURNZD higher in the near term. For as long as the New Zealand Dollar continues to weaken, EURNZD bulls will remain in the driving seat moving forward. A solid daily close above the 1.6550 is seen pushing prices higher towards 1.6730.
NZDCAD sinks towards 0.9100
The NZDCAD is on route to sinking lower if bears are able to secure a solid close below 0.9100. This pair has broken the bullish channel on the daily charts with bears eyeing 0.9100 and lower. A solid daily close below this point will most likely invite a decline towards 0.9000.
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NZDUSD heads to nearly eight-month old descending resistance-line, at 0.6945 now, breaking which the 0.6970 and the 0.7000 may please the Kiwi Bulls. Should prices rally beyond 0.7000, the 0.7050-55 and the 0.7100 are likely following numbers to appear on the chart. In case overbought RSI play its role and drag the pair downwards, the 0.6870 and the 50-day SMA level of 0.6800, adjacent to 0.6760 TL support, can limit immediate declines. Given the pair drops beneath 0.6760, the 0.6705 mark including 100-day SMA and another support-line around 0.6635 becomes crucial to watch.
Having breached 1.9070-65 horizontal-support, the GBPNZD may slip to seven-week long ascending trend-line, at 1.8850, which if not respected can further fetch the quote to 1.8750. However, the 1.8600-1.8590 may restrict the pair’s dip past-1.8750, breaking which the 1.8475 and the 1.8375 could play their roles. On the contrary, an upside break of 1.9070 can avail 1.9100 and the 1.9190 resistances before confronting short-term resistance-line of 1.9225. Assuming the pair’s successful rise above 1.9225, the 1.9300 and the 1.9425 may please the buyers.
Unless clearing the 0.9085-75 region on H4 closing, chances of the NZDCAD’s pullback to the 0.9040 and then to the 0.9015 support-line can’t be denied. Though, pair’s extended south-run under 0.9015, also below 0.9000 psychological magnet, can drag it to the 0.8940 and to the 0.8905 rest-points. Meanwhile, sustained break of 0.9085 enables the pair to aim for 0.9110 ahead of looking at the 0.9165-70 resistance-area. Moreover, buyers’ dominance after 0.9170 might not hesitate challenging the 0.9200 and the 0.9255 numbers to north.
Alike NZDUSD, the NZDCHF also rises towards the medium-term resistance, namely the 0.6900 TL, but overbought RSI may question the pair’s afterward strength. If at all prices continue rallying beyond 0.6900, the 0.6940 and the 0.6965 can offer intermediate halts to its run up targeting 0.7000 round-figure. Alternatively, the 0.6815, the 50-day SMA level of 0.6740 and the 0.6700 mark comprising 200-day SMA seem adjacent supports for the pair. Should the 0.6700 SMA figure fall short of limiting the pair’s drop, the 0.6640-35 support-confluence, encompassing 100-day SMA & an upward sloping trend-line, could grab market attention.
Having reversed from 1.3325-15 resistance, the USDCAD is declining towards 1.3210 but the ten-week old ascending support-line, at 1.3185, could confine the pair’s downside then after. Should prices continue trading southwards past-1.3185, the 1.3125 and the 1.3080 may offer intermediate halts during the pair’s slip to 1.3055. If at all the pair manage to surpass the 1.3325 upside barrier, the 1.3380 & the 1.3420 can please buyers prior to challenging them with 1.3440-45 resistance-region. Given the pair’s ability to cross the 1.3445 mark, the 1.3500 & the 1.3565 might gain market attention.
Alike USDCAD, the EURCAD is also gradually slipping in direction to a TL support, at 1.5060, which if broken highlights the importance of 1.5000 psychological magnet. During the pair’s sustained dip beneath 1.5000, the 1.4950 & the 1.4900 seem to be buffers ahead of fetching the quote to 1.4845 support. Alternatively, the 1.5170 trend-line resistance can limit the pair’s nearby advances, breaking which 1.5180 & 1.5240 could appear on Bulls’ radars. However, the 1.5300-1.5310 horizontal-zone may restrict the pair’s rally above 1.5240, if not then 1.5400 can come back on the chart.
Failure to overcome the 0.9075-85 resistance-area presently drags the NZDCAD to 0.8950 support-line, breaking which the 0.8930, the 0.8915 and the 0.8900 may entertain the sellers. Though, pair’s refrain to respect the 0.8900 round-figure might not hesitate calling the 61.8% FE level of 0.8870 as a quote. Meanwhile, the 0.9000 & the 0.9030 can act as adjacent resistances for the pair before fueling it to the 0.9060 resistance-line. Should prices surge past-0.9060, the 0.9075-85 and the 0.9110 can become optimists favorites.
While inability to sustain 200-day SMA dragged NZDUSD to five-week low, 50-day SMA & short-term ascending support-line presently restricts the pair’s further downside around 0.6730-20. Should the pair registers a daily closing beneath the 0.6720, the 0.6700 and 100-day SMA level of 0.6665 might entertain sellers before pleasing them with 0.6600 mark. On the contrary, 0.6820 and the 0.6835, comprising 200-day SMA, seem nearby resistances for the pair to clear, breaking which the 0.6850, the 0.6880 and the 0.6900 can play their roles. However, the 0.6965-75 and the 0.7000 round-figure may confine the pair’s advances past-0.6900.
Break of two-month old resistance-line helps the EURNZD to confront 50-day SMA level of 1.6915, which if broken on a D1 basis could propel the quote to 1.7115-20 region. In case buyers refrain to respect the 1.7120 barrier, the 1.7225, including 100-day SMA, followed by 1.7300, might challenge the Bulls. Assuming the pair’s failure to cross 1.6915, the 1.6790-75 support-zone can regain market attention as break of which may not hesitate fetching prices to the 1.6630 and the 1.6500 rest-points. If at all the pair continues declining under 1.6500, the 1.6420 and the 1.6325 may flash on Bears’ radar to target.
AUDNZD’s recent pullback couldn’t surpass a downward slanting trend-line since early-November, which in-turn drags the pair towards 1.0490 and 1.0450 supports. Given the pair’s extended downturn beneath 1.0450, the 1.0430, the 1.0400 and the 61.8% FE level of 1.0380 may appear on the chart. Alternatively, the 1.0580-85 area can limit the pair’s upside beyond 1.0550 trend-line break but successful clearance of 1.0585 may escalate the recovery to 1.0625 and the 1.0670. Though, the 1.0690-1.0700 could try questioning the pair’s strength after 1.0670, breaking which 1.0765 and the 1.0800 might become optimists favorites.
Having bounced off immediate support-line, the NZDUSD is again aiming for the 0.9185 resistance prior to confronting the 0.9250-55 multiple-top region; though, a sustained break of 0.9255 enables the pair to look for 61.8% FE level of 0.9320 as a landmark. Meanwhile, pair’s dip below 0.9070 TL support can trigger its south-run to 0.9000 and the 0.8915 levels. Moreover, the 0.8860, the 0.8770 and the 0.8745 are likely consecutive supports that could try holding the pair under 0.8915.
Even after trading at the highest levels in eighteen-months, the USDCAD has to close beyond 1.3410 on a weekly closing basis in order to aim for 1.3450 and the 1.3500 resistances-levels; however, the 1.3585-1.3600 confluence-region, including upper-line of an ascending trend-channel & horizontal-barrier, can confine the pair’s upside if at all it crosses 1.3500 mark. In case prices rally above 1.3600, the 1.3650 & 1.3740 may offer intermediate halts prior to highlighting the 1.3800 resistance. Alternatively, the 1.3330 & the 1.3260 could serve as immediate supports for the pair, breaking which 1.3180 & 1.3125 might gain traders’ attention. Given the sellers’ refrain to respect 1.3125, the 200-week SMA level around 1.3000 seems crucial to watch.
Not only six-week old upward slanting trend-line but 200-day SMA could also challenge the AUDCAD’s downside, which in-turn signal brighter chances of its pullback to the 0.9700 and then to the 0.9770 numbers to north. Should the quote manages to hold its strength past-0.9770, the 0.9800, the 0.9840 and the 0.9885 are likely following resistances to appear on the chart. Meanwhile, a D1 close beneath the 0.9660 TL-support needs to conquer 200-day SMA level of 0.9635 to revisit the 0.9600 and the 0.9550 rest-points. Moreover, pair’s sustained downturn below 0.9550 can avail 0.9515 and the 0.9465, including 100-day SMA, as supports.
NZDCAD’s failure to hold 0.9185-75 breakout maintains the importance of resistance-turned-support, breaking which the pair can come back to an ascending TL, at 0.9120. If at all the 0.9120 fall short of limiting the price decline, the 0.9100, the 0.9035 and the 0.9000 could become Bears’ favorites. On the contrary, the 0.9260, the 0.9285 and the 0.9315-25 can keep trying to restrict the pair’s near-term advances, which if broken may escalate its rise to 0.9365 level. Additionally, the 0.9400 and the 0.9445 might please Bulls beyond 0.9365.
The NZDUSD pair has been dropping notably over previous months and it has reached levels unseen since January 2016. However, it is thought that bulls might soon re-appear as the bearish momentum is becoming exhausted and the pair has failed to drop to new lows, despite extreme short positions.
Judging from the recent CFTC report, the New Zealand Dollar is the most oversold currency ever, which may lead to a sharp move in the opposite direction when investors start closing their short positions. This might be expected to happen soon and, therefore we are turning slightly bullish on the antipodean currency.
Additionally, the same picture is repeated when it comes to US bonds, where extreme short positions have accumulated over previous months. These shorts will most likely be covered as well, which could lead to a notable decline in US yields, especially if US stocks continue to drop. This event might be negative for the US Dollar, which fails to rally, despite higher yields and records long positioning.
We therefore think that as the NZD short unwinds, so will the USD longs, which could lead to a strong rally when it comes to the NZDUSD pair.
Technically speaking, there is a bigger bullish divergence between the RSI indicator and the price, which could help the bulls push the price higher.
The NZDUSD pair is now trading in the bearish channel, but it looks ready to breach above the upper line. The first target for the long position could be at 0.67, although the pair will probably fight a bit at the 100-day moving average, slightly below this level. If this resistance is taken out, the Kiwi could appreciate further toward the 0.6850 level. This might occur over the next several weeks. Stop loss might be well placed below 0.64350.
This article was written by Peter Bukov, one of TeleTrade’s leading analysts.
Even after bouncing off the 0.6500 round-figure, NZDUSD couldn’t clear the 0.6575-80 resistance-confluence, comprising 50-day SMA & a short-term descending trend-line, which triggered the pair’s pullback towards 0.6500 re-test. In case the pair refrain to respect the 0.6500 mark, the 0.6470 and the 0.6420 are likely following rests that can be availed but its slide beneath the same could highlight the importance of 61.8% FE level of 0.6345. Alternatively, a D1 close beyond 0.6580 can escalate the pair’s recovery to 0.6610 and then to another downward slanting resistance-line, at 0.6655. Given the pair’s successful rise above 0.6655, the 100-day SMA level of 0.6675 and the 0.6700 may please the buyers.
EURNZD struggles with 100-day SMA level of 1.7375 in order to justify its strength in targeting the 1.7410-15; though, pair’s advances past-1.7415 might find it hard to conquer the 1.7520 trend-line. Should prices surpass 1.7520 on a daily closing basis, the 1.7540 and the 50-day SMA level of 1.7600 can appear in the Bulls radar. Meanwhile, the 1.7260, 1.7200 and the 1.7155, including 200-day SMA, might offer immediate supports to the pair prior to dragging it to the 1.7115-05 horizontal-support. Assuming the quote’s dip below 1.7100, the 1.7020 and the 1.7000 psychological magnet could become sellers’ favorites.
With its repeated reversals from 72.30-20 support-zone, NZDJPY is likely to confront 100-day SMA level of 74.50 but its further upside can be restricted by nine-month old descending TL, at 74.80. If at all the pair manage to cross 74.80, the 75.50 and 200-day SMA level of 76.00 may be observed if holding long positions. On the contrary, 73.55 can serve as adjacent support, breaking which 73.10 & 72.70 might act as intermediate halts before dragging the pair to 72.30-20 again. However, pair’s plunge below 72.20 opens the gate for 61.8% FE level of 71.00.
Having smashed 50-day SMA, the NZDCAD is expected to run towards eight-week long resistance-line, around 0.8650, which if broken could propel the quote to 0.8690 and the 100-day SMA level of 0.8730. In case the prices keep rallying above 0.8730, the 0.8780 and the 0.8825-30 area can challenge the optimists. Let’s say the pair closes beneath 50-day SMA level of 0.8555, then the 0.8520 support-line figure becomes an important number to watch as break of which can flash 0.8450 & 0.8390 on the chart. Moreover, pair’s extended south-run after 0.8390 may have 0.8320 and the 0.8245, comprising 61.8% FE, as supports.
Having breached 50-day SMA & near-term important TL, the USDCAD seems all set to challenge the 1.3265-70 horizontal-region but overbought RSI might question the pair’s further upside. Though, pair’s sustained rise beyond 1.3270 can help it aim for the 1.3330 and the 1.3385 resistances. Meanwhile, the 1.3160 could offer immediate support during the pair’s pullback before highlighting the resistance-turned-support confluence of 1.3100-3090. Given the sellers fetch prices beneath 1.3090 on a daily closing basis, the 1.3000, the 1.2910 and the 200-day SMA level of 1.2850 may gain market attention.
Even after taking a U-turn from resistance-line of short-term “Rising Wedge”, the EURCAD can’t be considered weak unless declining beneath the 1.5165 support-line. As a result, chances of the pair’s pullback to 1.5290 and consequent advances to 1.5320-25 horizontal-line can’t be denied. Should the pair crosses 1.5325 barrier, the 1.5370, the 1.5415 and the 1.5440 can entertain buyers prior to pleasing them with 1.5465 mark. On the downside, the 1.5185 and the 1.5165 may limit the pair’s nearby downside, break of which can confirm the bearish technical pattern with theoretical targets of 1.5050 and the 1.5010-5000. Moreover, pair’s weakness below 1.5000 might not hesitate testing the 1.4885, the 1.4830 and the 1.4800 rest-points.
GBPCAD’s bounce off the 1.6595-85 support-zone has to surpass the 50-day SMA level of 1.7035 in order to be capable of visiting the 1.7155 mark but its further upside might find it hard to conquer the 100-day SMA & five-month old descending TL, around 1.7240-50. Assuming that the quote closes beyond 1.7250 on a D1 basis, the 1.7465-70 may flash in the Bulls’ radar. In case prices fail to hold recent recovery, the 1.6800 can act as adjacent support for the pair, breaking which the 1.6750 and the 1.6585-75 could play their roles. It should also be noted that the pair’s drop below 1.6575 can make it vulnerable to plunge towards 1.6355-50 support-area.
With the five-week old descending trend-line restricting the NZDCAD’s immediate rise around 0.8660, the pair is likely to revisit the 0.8615 and the 0.8600-0.8595 support-region. Though, refrain to respect the 0.8595 can drag the quote to 0.8560 and then to the 61.8% FE level of 0.8495. Alternatively, a clear break of 0.8660 could escalate the pair’s recovery towards 0.8685 and the 0.8740 levels ahead of highlighting the 0.8775 and the 0.8825-30. If the pair continue trading north-wards after 0.8830 then the 0.8875 and the 0.8920 might become traders’ favorites.
The USD/CAD pair failed to capitalize on the weekly bullish gap and was now seen consolidating in a range, just above mid-1.3000s. The pair broke to the upside last Friday and reached a fresh weekly high at 1.3087. Price was holding near the highs, with a bullish tone, consolidating important daily gains. From the weekly low the pair raised almost 200 pips.
The move to the upside followed comments from Canadian negotiator Freeland who said “we’re not there yet” regarding the trade deal with the US and Mexico. PM Trudeau added that a “no deal” on NAFTA was better than a bad one. Also, the pair moved higher on the back of a stronger US dollar which gained momentum amid risk aversion market sentiment. Meanwhile, US President Donald Trump on Saturday threatened to exclude Canada from a new NAFTA agreement after the recent US-Canada trade negotiations ended without any agreement. Trump also warned the Congress not to interfere with these negotiations or he would simply terminate the trilateral NAFTA pact altogether.
Exit From NAFTA Looks Highly Likely For Canada
While Canadian Prime minister is ready for NAFTA exit instead of agreeing to a bad deal, Loonie struggles to come to terms on NAFTA proceedings which kept weighing on the Canadian Dollar at the start of a new trading week. The pair touched an intraday high level of 1.3077, albeit struggled to gain any follow-through traction despite a combination of supporting factors. A modest US Dollar uptick, coupled with a mildly negative tone around crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, did little to inspire the bulls and eventually led to a subdued/range-bounce price action through the early European session earlier today.
Moreover, traders also seemed reluctant to place any aggressive bets amid holiday-thinned liquidity conditions on the back of a bank holiday, both in the US and Canada. Moving ahead, this week’s important macro releases scheduled at the beginning of a new month, including the keenly watched US non-farm payrolls data, and the latest BoC monetary policy update on Wednesday will play a key role in determining the pair’s next leg of directional move.
Despite last week’s strong up-move, the pair remains within a short-term descending trend-channel held over the past two months or so. Hence, it would be prudent to wait for a decisive move beyond the channel resistance, currently near the 1.3100 handles, before placing any major bets in Greenback’s favor. On the flip side, a slide back below the key 1.30 psychological mark would reinforce the trend-channel and turn the pair vulnerable to head back towards challenging the 1.2900 handle support.
Having taken a U-turn from 0.6720-25 resistance-confluence, NZDUSD highlights the importance of a week-long ascending trend-line, at 0.6655, which if broken can further fetch the quote to the 0.6640 and the 0.6610 supports. Given the pair’s additional downturn beneath 0.6610, the 0.6570 and the 0.6545 can entertain sellers. Alternatively, an upside break of 0.6725 can quickly propel the pair to 0.6765 and then to the 0.6800 resistance-mark. Also, pair’s successful advances past-0.6800 can confront the 0.6830 and the 0.6860 north-side barriers.
Alike NZDUSD, the NZDJPY also reversed from immediate resistance, namely the 74.05-10 horizontal-region, which in-turn signal brighter chances for the pair’s drop to the 73.55 and to the 73.20 TL figure. Should prices continue trading southwards after 73.20, the 72.80 and the 72.30 may please the Bears. In case the pair surpasses 74.10 resistance, its rise to 74.50 and 74.75 could well be expected. However, a month-long downward slanting trend-line, around 75.45-50, might challenge the buyers beyond 74.75.
AUDNZD is likely clubbed in a symmetrical triangle between the 1.0940 support and the 1.1030 resistance but oversold RSI levels indicate the pair’s strength to come. Hence, the 1.1070 and the 1.1125 to gain investor attention once 1.1030 is broken. If Bulls refrain to respect 1.1125 hurdle, the 1.1175 and the 61.8% FE level of 1.1230 may receive optimists’ eye-share. Meanwhile, break of 1.0940 can flash 1.0900 and the 1.0845-40 as quotes whereas 1.0775 and the 1.0710 could become important to observe afterwards.
Even after failing to clear the two-month old descending trend-line, the NZDCAD’s near-term declines can be restricted by the 0.8685 TL support. Given the pair drops below 0.8685, the 0.8630 and the 0.8600 may offer intermediate halts during its plunge to 0.8560 and the 61.8% FE level of 0.8500. On the upside, the 0.8745 seems crucial for short-term buyers as break of the same could escalate the pair moves to the 0.8785 and then to the 0.8825-35 resistance-zone. Assuming that the pair keeps rising above 0.8835, the 0.8870, the 0.8915 and the 0.8975 are likely following numbers to appear on the chart.
Last week was great for the USD. Dollar Index made new long-term highs and the EURUSD broke important supports. On almost all instruments with the USD, we can find interesting setups. Today, we present you the USDCAD, where the buy signal is still relatively fresh.
It seems like this pair is coming back to the uptrend, after being in a deeper correction since the end of June. Our positive view on the USDCAD is based on the few factors. First one is the long-term up trendline, which supports higher lows and highs since the beginning of February (green). At the beginning of August, the price bounced again, which confirms the uptrend in 2018. The second factor is the flag (blue lines). This is a trend continuation pattern, so we should see the breakout of the upper line soon. Last but not least is the breakout of the horizontal resistance on the 1.31 (red). The price being above that line is a confirmation of the positive sentiment.
With this setup, in the next few weeks, we should see the further upswing. All we need for a legitimate trigger is the daily candlestick closing above the blue line, which can happen as soon as today.