This pair seems to be completing the correction I’ve been waiting for so I’m putting my orders in to catch the uptrend. Take a look!
NZD/CAD dropped all the way down to the area of interest around .9450-.9500, which is close to the 61.8% Fibonacci retracement level and the rising trend line connecting the lows on the longer-term charts. I’m thinking that a bounce could be in order since price is also testing the bottom WATR this week.
In addition, I’m seeing a bullish divergence as stochastic made lower lows since mid-October while price made higher lows. I’m gonna go long at market with a stop below the trend line and aim for the .9900 area near the swing high.
Renewed expectations for an OPEC output deal in their November 30 meeting have pushed the oil-related Loonie higher against its forex rivals recently. However, I’m inclined to think that one or two nations will stubbornly refuse to cooperate so the cartel could have difficulty getting anything done, driving oil and the Loonie lower once more. Besides, data from Canada has been far from impressive in terms of inflation and employment.
Meanwhile, New Zealand has been printing strong data these days and has even sustained its gains in dairy prices during the latest GDT auction. Although the RBNZ recently cut interest rates, the economic improvements suggest that they might refrain from easing again for a long while.
Here are the deets:
Long at market (.9550), stop loss at .9375, and profit target at .9875. I’ve risked 0.5% of my account on this setup and I’m going for a 1.85-to-1 R:R.
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See also: Q3 2016 Trading Performance Review