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NZD is having trouble extending its gains against CAD after a strong showing so far this week.
Is NZD/CAD ready to extend its longer-term downtrend? Or are the bulls just taking a breather?
NZD/CAD 4-hour Forex Chart by TradingView
Talks of interest rate cuts from the Fed got risk takers excited this week, with commodity-related currencies like AUD and NZD trading in uptrends for most of the week.
The oil-related Loonie, which already saw steady gains in late March, weakened a bit despite rising crude oil prices.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the New Zealand and Canadian dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
NZD’s strength helped boost NZD/CAD from its S1 (.8060) April lows all the way to the R1 (.8160) Pivot Point line.
As you can see, NZD/CAD’s upswing stopped near a previous support zone and the 100 SMA in the 4-hour time frame.
If the consolidation leads to a downside breakout, then NZD/CAD may extend its February downtrend and head for the Pivot Point (.8120) line if not its .8060 previous lows.
But if NZD bulls still have some hustle in their muscle, then NZD/CAD could see another upswing. This time, bullish pressure may take the pair to the .8200 psychological handle or the R2 (.8220) Pivot Point zone near the 200 SMA.
What do you think? Which way will NZD/CAD go in the next trading sessions?
