FX NZD/CAD Bull Speculation: Break in the Resistance

Trading opportunities for currency pair: New Zealand dairy produce is becoming more expensive. The NZD/CAD has left the range: a bull signal.

Alpari :Trading Ideas

Short-term Trading Idea FX NZD/CAD – Bull Speculation: Break in the Resistance

Trading opportunities for currency pair: New Zealand dairy produce is becoming more expensive. The NZD/CAD has left the range: a bull signal. Taking a rebound from the 0.8289-0.8355 support zone into account, I’ll risk going for a strengthening of the NZD to 0.8698.

Background:
At the end of August the market participants’ attitude to the NZD in relation to its Canadian counterpart changed. After an auction took place on 18th August, the price of dairy produce increased, whilst oil prices fell. The New Zealand dollar lost value due to a fall in Chinese stock indices and an announcement by the New Zealand Reserve Bank that they are not in any rush to put up rates.

Current situation
A solid support has formed between 0.8289 and 0.8355. On Friday, a resistance from a 19-day consolidation was broken. The New Zealand dollar is up due to the price of dairy produce increasing and due to Fonterra upping their forecast for dried milk by 75 cents to 4.60 dollars a kilo. Since Brent oil has been in a narrow range for a while now, the buyers strengthened above 0.8491 (9th September maximum) with consummate ease.

What’s interesting at the moment?
The NZD/CAD has left the range and this is a bull signal. Taking the rebound from the 0.8289-0.8355 support zone into account, I’ll risk saying the New Zealander will strengthen to 0.8698.

Vladislav Antonov, Alpari Analyst