The NZDCAD pair – representing the exchange rate of the New Zealand currency to the Canadian dollar – set last Friday at 0.8950 maximum of this year.
Monday’s session turned out to be a very bearish one, and on the daily chart there was a divergence suggesting a change in sentiment on this pair and announcing further declines.
NZDCAD H4 price may move towards channel support
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In the H4 chart we will notice that since mid-June the quotations have been moving in the growth channel, whose resistance has been tested twice.
Given the daily chart’s bearish divergence and the currently ongoing divergence on H4, we can expect declines to the support of the channel with a high probability, and after it is overcome, the target may be a strong S/R level = 0.8800.
Today’s Bank of Canada decision to keep interest rates unchanged at 0.25% may prove to be a strengthening factor for the Canadian dollar, which supports the above described bearish scenario for the NZD/CAD pair.
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