Daily Forex Technicals |
Written by Forex.com |
May 22 13 02:35 GMT
NZDCAD: Testing Key Support
NZDCAD has been on a downward trajectory since early April, with the sell-off intensifying after the pair broke through a key support zone around 0.8450 – bottom of daily Ichimoku cloud, trend line support and 100day SMA. The resulting push lower sent the pair towards its 200day SMA, yet this support zone has held up thus far. In fact, the pair has drifted higher in the past few days as part of a natural retracement after sinking deep into oversold territory.
From a fundamental perspective the sell-off of this pair was largely driven by severe NZD weakness on the back of intervention talk in NZ and some weak economic data out of China, which corresponded with some technical weakness in NZDUSD.
From here, the pair's push through the aforementioned key support zones does suggest some underlying weakness in NZDCAD. However, a break of the pair's 200day SMA may be needed before getting too bearish. In the short-term there is the possibility that the pair will retest trend line resistance – prior support (see chart). A break to the upside at this point may discredit earlier technical weakness in the pair.
- 0.8285 – 200day SMA and 50week SMA
- 0.8260 – yearly low and prior support
- 0.8165 – 100week SMA and weekly could top
- 0.8410 – prior resistance
- 0.8465 – 100day SMA
- 0.8535 – daily could base
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