Remember that NZD/CAD descending channel I had been watching a few days ago? Well, it looks like the pattern is still holding so I’m gonna try to hop in that trend again!
As Pip Diddy mentioned in his U.S. session recap, crude oil prices have been on a tear these days, boosted by falling production levels in Nigeria and Venezuela, along with positive forecasts from Goldman Sachs. The oil-related Loonie might then be in for stronger gains, allowing the NZD/CAD channel to stay intact.
However, there are a bunch of top-tier catalysts from New Zealand this week so I think I’ll wait for a few more signs that Kiwi bears have enough energy to push for a test of the channel support. For today we’ve got the quarterly inflation expectations figure and the dairy auction, with downbeat results likely to spur another round of losses for this pair.
I’ve zoomed in to the 1-hour time frame look for a potential entry area and I’m seeing a symmetrical triangle formation for now. I’ll enter a short position on a break of the .8750 support area and I’ll aim for the 4-hour channel bottom around .8500.
Here’s my plan:
Short NZD/CAD at .8725, stop loss at .8925, profit target at .8525. I’m risking 0.5% of my account on this setup for a potential 1:1 return-on-risk.
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