NZD/CAD 4H Chart: Encounters support level
The NZD/CAD currency pair has been trading in several descending channels since the beginning of the year. The most important of the patterns is a downtrend line, which has guided the price lower.
After hitting a resistance level formed by the 55-hour simple moving average near 0.8827 on August 8, the exchange rate began to decline massively. As a result, the pair fell to the bottom border of a junior descending channel.
Technical indicators on both the smaller and the larger time frames demonstrate that the movement of the currency exchange rate is likely to continue its southern journey during the following trading sessions.
After hitting a resistance level formed by the 55-hour simple moving average near 0.8827 on August 8, the exchange rate began to decline massively. As a result, the pair fell to the bottom border of a junior descending channel.
Technical indicators on both the smaller and the larger time frames demonstrate that the movement of the currency exchange rate is likely to continue its southern journey during the following trading sessions.
Comment:
The NZD/CAD currency pair has been trading in a descending channel since mid-June. This descending channel has guided the currency pair toward March 2016 low level at 0.8509.
The currency pair reversed from this low level a few days ago. Currently, the rate has breached the 50-hour simple moving average at 0.8559. The next level the exchange rate could target will be a resistance line formed by the 200-hour SMA at 0.8647.
However, a resistance cluster formed by the combination of the weekly and the 100-hour SMA at 0.8611 could hinder the currency exchange rate from hitting this target today.
The currency pair reversed from this low level a few days ago. Currently, the rate has breached the 50-hour simple moving average at 0.8559. The next level the exchange rate could target will be a resistance line formed by the 200-hour SMA at 0.8647.
However, a resistance cluster formed by the combination of the weekly and the 100-hour SMA at 0.8611 could hinder the currency exchange rate from hitting this target today.
Comment:
The New Zealand Dollar has depreciated massively against the Canadian Dollar since the end of September after the currency pair reversed from the upper boundary of a three-month descending channel at 0.8688.
The exchange rate tested the monthly support level at 0.8362 during the morning hours of today’s session. From a theoretical point of view, the pair could reverse from that level and aim at a resistance cluster formed by the weekly and the monthly PPs near the 0.8439 mark within this session.
However, if this support line is unable to hold, the currency exchange rate will continue its downside momentum and target the bottom border of the three months descending channel at 0.8250 during the following trading sessions.
The exchange rate tested the monthly support level at 0.8362 during the morning hours of today’s session. From a theoretical point of view, the pair could reverse from that level and aim at a resistance cluster formed by the weekly and the monthly PPs near the 0.8439 mark within this session.
However, if this support line is unable to hold, the currency exchange rate will continue its downside momentum and target the bottom border of the three months descending channel at 0.8250 during the following trading sessions.
The low positioning of technical indicators on both the daily and the weekly time frames suggest that the NZD/CAD currency exchange rate could continue moving in the junior descending channel during the following trading sessions. However, given that the rate has moved closer to the up border of the descending channel, and the 55-hour simple moving average has fallen below the price, a breakout could be expected within this session.