Hello Traders,
Today we shall look at the NZDCAD pair and whilst this pair is at a very critical level when all technical considerations are kept in focus, it offers a really good entry if we initiate one at this level. Fundamentally, economists are expecting a dovish statement from Governor Poloz because of the number of jobs the economy churned last month. Well, the unemployment rate declined to 6.8% against the expected rise to 7.0% but what was conspicuous was the decline in manufacturing jobs and an increase in part time jobs-manufacturing jobs declined by more than 12000 while part time jobs rose by 39,400. This raises economic concerns and especially brings into attention the structural employment weakness in economy. We shall however wait for his statement today and analyze all his statements. Also worth mentioning is today’s New Zealand FPI released in the Asian session which rose by 0.4% from last month decline by -0.5%. This is important because it contributes to the overall NZD inflation data which is released quarterly.
So technically, what is happening in the charts-
Weekly chart reveals that the kiwi is peaking because it is currently at the key resistance trend line and any break below or above it will be fundamental. Price action is trending in the overbought regions in the daily charts and we are looking for a scenario where prices will trend even lower given that there has been a consolidation since the beginning of the week with candlesticks making a series of lower lows and higher lows relative to the upper BB with a full candle stick formed outside the upper BB. Another sign of confluence is that both the daily and 4HR chart stochastics are in the oversold region and that gives us another indication of a strong sell signal.
Our trade plan:
Sell Limit-Sell between-0.948-0.95
TP-0.9-Region of support
Have a good trading day

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