NZD/CAD Longs at Risk on Approach of Key Resistance at 9200
- NZD/CAD approaching critical Fibonacci resistance range
- Updated targets & invalidation levels
Chart prepared by Michael Boutros
Broader Technical Outlook: NZDCAD is coming into a key region of technical resistance at the confluence of the 1.618% extension of the ascent off the yearly lows and the 61.8% retracement of the December decline at 9204/07. Although the broader outlook remains weighted to the topside, the rally is vulnerable heading into this threshold and we’ll be looking for a pullback to offer more favorable long-entries. Key near-term support is eyed at the convergence of the 2015 open & a median-line parallel at 9043.
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Notes: The pair has been trading within the confines of a well-defined ascending channel fomation with channel suppoort converging on the 50% retracement a 9091 heading into the overnight session. Keep in mind the weekly opening-range low comse in at 9059 with our bullish invalidation level set to the 2015 open at 9043.
From a trading standpoint, I would be looking for an exahustion high / short-triggers on a move into key resistance at 9204/07 for a pullback into slope support. A breach above 9225 would be needed to keep the topside bias in play with such a scenario targeting 9300 & 9365. A quarter of the daily average true range (ATR) yields profit targets of 22-26 pips per scalp. The economic docket is rather light heading into the close of the week with markets fully focused on tomorrow’s critical U.K. referendum. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
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---Written by Michael Boutros, Currency Strategist with DailyFX
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