Daily Forex Technicals |
Written by Forex.com |
May 17 13 02:41 GMT
NZDCAD Tests A Key Support Zone
NZDCAD has been selling off hard since late April due to a broader flood out of the kiwi, which overshadowed a push higher in USDCAD. Whilst the main driving force behind recent weakness in NZDUSD and strength in USDCAD was a surge towards the US dollar, the NZ dollar was also hit by news that the RBNZ had intervened in the currency market to devalue the kiwi and may do so again. Furthermore, NZDCAD broke through trend line support around the same time as the RBNZ's Wheeler was talking down the kiwi. Overall, the one-two punch proved too much for NZDCAD, which has lost over 300 pips since early April.
The pair may be due for a short-term retracement with RSI and price action testing significant support zones. Price action is testing a support zone around 0.8300 - 50% retracement from a rally late last year and a prior support level. A failure to push through this level may see the pair retrace back towards a resistance zone around 0.8410. On the downside, a confirmed break of a support zone around 0.8300 may see the pair to its equivalent 61.8% retracement level. However, NZDCAD may run into some support around its 200day SMA, currently around 0.8280.
Data watch - CAD
Canadian CPI data at 12:30GMT - core CPI is expected to increase 0.2% m/m, while headline CPI is expected to remain flat.
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