Steven Mylonas
Bottomcatcher.com
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.
Bottomcatcher has made every attempt to ensure the accuracy and reliability of the information provided in this report. However, the information is provided without a warranty of any kind. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Bottomcatcher.
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