We’re checking out Loonie pairs once again with the BOC meeting coming up to likely shake up the Canadian dollar, as well as a simple trendline pattern setup on AUD/NZD to round out this comdolls special.
CAD/JPY is first up on deck, and as mentioned above, the upcoming Bank of Canada’s monetary policy meeting is likely to shake up Loonie pairs this week. And if you’re a bull on the Loonie ahead of the event, this first chart is something to check out.
On the daily chart above, we can see that the pair had been consolidating towards the 81.00 handle in August and September, but broke out big time to the upside in October. So, the momentum is in the bulls favor on this pair, and even if it reverses back, it’s likely buyers could step in around the broken swing high (82.00 area) to start a fresh leg higher from the consolidation area.
Now if you’re a bear on the Loonie ahead of the BOC event, NZD/CAD is approaching a very strong and clear support area on the four-hour chart.
The bears have only 30 pips or so to go before another retest of the 0.8250 area before buyers stormed back in September and October, and with stochastic already signaling potentially oversold conditions, we could see support form once again. This may be a perfect opportunity for Loonie bears who thinks the recent rally may be overdone and/or we’ll see a “buy-the-rumor, sell-the-news” scenario play out after the BOC meeting.
AUD/NZD is an interesting pair to check out this week as the recent rally from the strong support area just under the 1.0700 area means the range remains intact.
Now that the pair is about to retest the top of the range/falling highs pattern, technical traders may step in here, especially with the stochastic showing potentially overbought conditions.
We’ll likely see some action this week in both the Aussie and the Kiwi with Australia’s latest CPI report just ahead, as New Zealand’s business confidence data likely to bring in a little bit of volatility.