NZDCAD,H4 and Daily
The CAD has remained under pressure as WTI crude prices remain near 9-month lows, bottoming earlier at $58.26. NZDCAD’s rise to 0.89 area has been attributed to the dip in crude prices.
USOil prices are down 2.2% at $58.62. This is now the 12th consecutive down day in what is now the biggest 2-month back-to-back decline since late 2014 and early 2015. The latest nudge lower was provided by President Trump, who chastised in Twitter Saudi Arabia’s announcement yesterday that it will be trimming production by 500k barrels per day in December. WTI prices had reached a high of $61.28 yesterday on the back of the Saudi news.
This dragged the CAD lower, with NZDCAD printing a new 4-month high at 0.8941, after rejecting 4 consecutive days’ Resistance at 0.8917. The pair confirmed a floor at 0.8830-0.8855 (200-day SMA and 3-day Support). This was followed by 2 extremely strong bullish weekly candles, which boosted the pair way above 200-month SMA and 20-week SMA, suggesting that bulls remain in control of the pair.
Today’s performance above 0.8917 confirmed the break of the 50% Fibonacci retracement level set since year’s peak on March 11. Meanwhile, the momentum indicators suggest that there is further steam to the upside in the near and medium term. Daily RSI crossed 70 barrier earlier, while on the weekly basis it is pushing above 50. Daily MACD lines are extending to the upside well above signal line, while weekly MACD lines formed a bullish crossover.
Therefore, as the technical picture looks bullish, the next immediate Resistance holds at July’s high at 0.8980. Next Resistance comes at the 61.8% Fibonacci level at 0.9055.
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Andria Pichidi
Market Analyst
HotForex
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