Got a Kiwi special on today’s canvas!
I’m looking at these correction levels on the ongoing trends of NZD/CAD and NZD/USD.
This pair has been cruising upwards with its higher lows and higher highs inside a rising channel on the hourly time frame.A pullback to the channel support seems to be in order, and the Fibonacci retracement tool shows additional areas where buyers might be hanging out.
Price might be in for a test of the 61.8% Fib at the .8520 area or the very bottom of the channel near the .8500 major psychological level.
If any of these hold as a floor, NZD/CAD could bounce back to the swing high at .8615 or the channel top closer to the .8650 minor psychological mark.
Technical indicators are in favor of more gains, too. Stochastic is pulling higher from the oversold region to confirm a return in upside pressure while the 100 SMA remains safely above the 200 SMA to reflect bullish vibes.
Remember that NZD/USD inverse head and shoulders pattern from last week?
Well, it looks like the pair already busted through the neckline and is now going for a quick retest.Zooming in to the hourly time frame shows that price is retreating to the 38.2% Fib that coincides with the former resistance zone at the .6230 area.
This also happens to be near the 100 SMA dynamic inflection point, which could add to its strength as a floor.
The 100 SMA is above the 200 SMA to hint that support levels are more likely to hold than to break, but Stochastic has some room to head south so the correction could keep going until oversold conditions are met.
With that, a larger retracement could reach the 50% Fib at .6210 or the 61.8% level closer to the .6200 major psychological support and 200 SMA.
If any of these are able to keep losses in check, NZD/USD could resume the rally to the swing high at .6283 or sustain the climb to the .6300 handle.
Don’t forget to check out our economic calendar for upcoming events that may move the markets.