NZD/CAD bears pile in for leg down
|The NZD/CAD currency pair has been in a long term downtrend since the highs of November 2016, creating lower swing highs along the way. From the March lows this year the NZD/CAD has enjoyed a robust rally which lasted up until the end of last month where it tested a strategic resistance zone comprised of the 200 period monthly moving average, 50% fib level (taken from the highs of November 2016 and the lows of March this year) and descending trend line, which all junction at (1).
Selling pressure has been clear over the past two weeks, proving this triple resistance cluster (1) was indeed a good selling opportunity ‘at least' for the short term (up to 3 weeks). For a longer-term outlook this could be taken as confirmation that perhaps another leg down is underway. Longer-term short sellers can benefit from a good risk/reward perspective around these current levels by allocating their stop just above the 200 SMA at (1). However, the bulls, on the other hand, will be expecting this decline over the past two weeks to be nothing more than a shallow profit-taking pullback. A noticeable ‘W' shape bullish recovery pattern which began on the 1st of May this year and completes back at the May highs also adds weight to the bulls hypothesis.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.