NZD/CAD breaches junior channel
The New Zealand Dollar is trading in two opposing channels against its Canadian counterpart. The senior pattern was formed mid-September when the Kiwi started to create distinctive waves up and down.
Its last moment upwards was likewise stranded between two channel lines. The rate peaked at 0.9020 and was subsequently dominated by bears.
The rate continued to plunge early on Wednesday and thus broke out of the junior pattern. It is likely that this fall is stopped at the weekly PP and the 200-hour SMA circa 0.8915, as technical indicators have already been pushed into the oversold territory.
The base scenario favours the rate recovering from its intraday losses and thus returning near the bottom boundary of the junior channel, the 100-hour SMA and the 50.0% Fibonacci retracement circa 0.8650.
In the medium term, however, the rate should push for the lower boundary of the senior pattern located near the monthly S1.
Its last moment upwards was likewise stranded between two channel lines. The rate peaked at 0.9020 and was subsequently dominated by bears.
The rate continued to plunge early on Wednesday and thus broke out of the junior pattern. It is likely that this fall is stopped at the weekly PP and the 200-hour SMA circa 0.8915, as technical indicators have already been pushed into the oversold territory.
The base scenario favours the rate recovering from its intraday losses and thus returning near the bottom boundary of the junior channel, the 100-hour SMA and the 50.0% Fibonacci retracement circa 0.8650.
In the medium term, however, the rate should push for the lower boundary of the senior pattern located near the monthly S1.
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The Kiwi might still push lower down to the 0.88 area, but, in general, momentum upward should be expected until 0.8920/40, at least.