NZD/CAD Rebound to Offer Favorable Entries- 9500 Key Resistance
- NZD/CAD rebound targeting levels of interest for short-entries
- Updated targets & invalidation levels
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Technical Outlook:NZDCAD is approaching a near-term resistance confluence at 9422/33– this region is defined by the 38.2% retracement of 2016 trading range, the 2016 open and the 200-day moving average. A critical resistance barrier is seen just higher around the 95-handle where a couple of longer-term slope-lines converge on the 61.8% retracement of the decline off the yearly high and the 2015 December high-day close (bearish invalidation). Bottom line: both these levels represents areas of interest for possible exhaustion / short-entries. A break below support at 9268 targets subsequent objectives at 9207 & 9113.
Notes:A closer look at price action further highlights Friday’s rebound off confluence support with the subsequent rally now targeting initial resistance. From a trading standpoint, I’ll be looking for exhaustion on a push higher with the broader outlook weighted to the downside sub-9508.
A quarter off the daily average true range (ATR) yields profit targets of 18-22 pips per scalp. Added caution is warranted heading into the RBNZ interest rate decision on Wednesday with the release likely to fuel increased volatility in the Kiwi crosses (also note we have dairy prices on tap tomorrow).
Relevant Data Releases
Other Setups in Play:
- Strategy Webinar: Rate-Hike Drop Exposes U.S. Dollar Vulnerability
- EURUSD: Post-FOMC Rally at Initial Resistance
- DXY Poised For Yellen: Here’s the FOMC Game Plan
- NZD/USD: FOMC to Fuel Critical Range-Break
– Written by Michael Boutros, Currency Strategist with DailyFX
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