WEEKLY FOREX ANALYSIS
23 December to 27 December
On the fundamental side, Bank of Canada Governor Poloz repeatedly said in the past that the central bank would hike interest rates when the macro-data indicates it’s a must. Only in August, Canada has beaten all market expectations on high-impact reports, including monthly trade balance (-0.6B vs -2.3B expected), monthly employment change (54.1K vs 17.0K expected), unemployment rate (5.8% vs 5.9% expected) and CPI m/m (0.5% vs 0.1%). Only retail sales came in slightly lower than market forecasts with a reading of -0.2% vs -0.1%, mostly due to lower sales at gasoline stations. It’s also worth mentioning that the Canadian annual inflation rate hit 3% in July – a six-year high.
From a Monthly Timeframe perspective, NZDCAD has been respecting a downtrend channel, and has bounced off from 0.82759, which the last recorded lowest since July 2015.
From a Daily Timeframe perspective, a Short trade might be ready. NZDCAD has met with a strong resistance and support area area of 0.87061 to 0.87397. However, as I am writing this review, the price action has been retesting the 0.87386.
In a Timeframe of 4 hours and 1 hour perspective, NZDCAD is about to retest the Day Channel, potentially giving about 70 pips. To be sure, wait for a 4h candle go close and see if the prices are below 0.87388 or above, and if the point 0.87388 is being rejected. However, I will strongly suggest to look at a Buy Trade and not a Sell.