NZDCAD Posts Outside Day Reversal Pre-BoC; Shorts Face 8700 Hurdle
- NZDCAD posts reversal candle off key resistance- scalps favor shorts
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- NZDCAD posts outside-day reversal off long-term resistance confluence- bearish
- Interim support at highlighted region into 8700- Break to mark larger correction lower
- Subsequent support objectives at 8605 & 8535
- Key resistance 8905/38 – bearish invalidation
- Event Risk Ahead: Bank of Canada (BoC) Interest Rate Decision tomorrow, Retail Sales on Thursday and Canada Consumer Price Index (CPI) on Friday
Notes: NZDCAD has posted an impressive outside-day reversal candle off a key resistance confluence into 8900 - a region is defined by former trendline support extending off the 2011 low, the 200-day moving average and a near-term sliding parallel. Today’s decline rebounded off the median-line extending off the July before coming back to test the weekly opening-range low as resistance.
The focus is lower while within the pitchfork formation off last week’s high with a break of today’s low targeting trendline support dating back to September 23rd. Bottom line: look to sell rallies while below 8865 (bearish invalidation) targeting 8700, 8650/75 & 8605.
A quarter of the daily average true range (ATR) yields profit targets of 26-29pips per scalp. Caution is warranted heading into event risk out of Canada into the close of the week with the BoC, retail sales, & CPI release likely to fuel added volatility in CAD crosses.
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Relevant Data Releases Next Week
Other Setups in Play:
- Webinar: ECB/BoE Playbook- EUR/GBP Shorts Target Key Support Zone
- EURGBP Reverses Off Critical Resistance- Shorts Favored Sub 7386
- EURUSD Long Scalps Eye Key Resistance - Breakout Targets 1.18
- EURAUD Recovery Scalp- Rally to Offer Favorable Shorts
- Webinar: USD Weakness Targets Key Support- Comm Bloc Overstretched?
---Written by Michael Boutros, Currency Strategist with DailyFX
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