Since the BOC statement is coming up, I’m keeping close tabs on Loonie pairs to see if any breakouts might occur. Check out this long-term range plan on NZD/CAD!
On the pair’s daily time frame below, price is already testing the ceiling around the .9550 minor psychological level. Stochastic is indicating overbought conditions so NZD/CAD’s rallies might be cut short from here. If so, the pair could set its sights on the bottom of the long-term range at .8700 or at least until the middle around .9000-.9100.
Of course this could depend on the upcoming BOC decision, as dovish remarks from Canadian policymakers could lead to an upside breakout and a sustained climb. After all, the Kiwi has been one of the strongest performers these days, thanks to their central bank’s preference for keeping rates unchanged for the time being.
If the BOC decides to focus on the stabilizing oil market and the green shoots in the Canadian economy, the Loonie could be in for a strong rebound since this would suggest that interest rates could also be maintained at their current levels. In addition, the central bank could also reiterate that Canada could benefit from the progress in the U.S. economy.
I haven’t set any actual entry orders yet since I’d rather watch this pair’s reaction to the BOC decision. Besides, I’m also watching a USD/CAD triangle setup in case the Loonie suffers a sharp selloff. I’ll keep you posted through my Twitter account so make sure you’re following me!
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