This week starts with the weaker USD and stronger EUR but we can see a great situation on the pair other than from the majors’ group – NZDCAD. Since the beginning of July, this pair was locked inside of the symmetric triangle pattern (blue). The volatility was decreasing and we were waiting for a breakout.
Breakout happened at the end of the week and it was to the downside. NZDCAD decided to use this pattern for a trend continuation as that what the trend was before the triangle was formed. After the breakout, the price went lower but met a very important support – long-term up trendline (black), where the take profit action took place. Currently, the price is testing the previous support as the closest resistance. Any bearish price action on the orange area will be a strong sell signal strengthened by the bounce from the 50% Fibonacci.
At the beginning of the European session, NZDCAD draws a shooting star on the H4 chart but as for now, this one is not respected. Sellers need to wait for something more encouraging. Possible sell signal will be denied, once the price will come back above the orange area but as for now, it is less likely to happen.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
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