the Bank of Canada statement for June 2023 he is coming!
With the BOC potentially announcing a ‘hawkish commentary’ and the RBNZ nearing the end of its rambling cycle, is the NZD/CAD expected to crash soon?
As you can see from the hourly chart below, the pair has formed lower tops and found support around 0.8130, creating a descending triangle.
Forex NZD/CAD for 1 hour Planned by TV
Although the Bank of Canada is widely expected to sit on its hands for this month’s policy meeting, many believe officials may reiterate that they are open to further tightening if inflation remains strong.
If that is the case (or if they raise rates this time), then the Canadian dollar could get a fresh boost against its forex rivals, which could lead to a break-down in the NZD/CAD.
After all, the RBNZ has hinted that they may stop tightening in upcoming meetings because they kept their OCR forecast unchanged last May.
A breakdown of the triangle could send NZD/CAD down to S1 (.8090) or even S2 (.8050) which lines up with a minor psychological sign.
Now this pair is moving An average of about 70 points per dayso these bearish targets are within reach.
Technical indicators also indicate that the odds are in favor of further losses for the NZD/CAD. The 100 SMA is below the 200 SMA and aligns with the top of the triangle adding to its strength as a ceiling.
Meanwhile, Stochastic has some room to head lower before it reverses oversold conditions, so sellers can stay in control for now.
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