NZDCAD has been on a steady downtrend, trading inside a descending channel on its 4-hour time frame. Price appears to be pulling up to the channel resistance around the .8850 minor psychological level, which might hold as resistance.
This area lines up with the moving averages, which might add to the strength of the resistance. The 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside.
In addition, stochastic is indicating overbought conditions so buyers might be exhausted and could let sellers take over. RSI is heading north so there’s some bullish pressure left but this oscillator is also nearing the overbought zone. A bearish divergence can be seen on stochastic as price made lower highs while the oscillator had higher highs.
New Zealand has a couple of catalysts lined up that could provide volatility for this pair. First up is the Global Dairy Trade auction in the late US session that might show a decline in prices. Dairy prices have climbed in the past couple of auctions but analysts are doubtful that these gains can be sustained.
Meanwhile, the quarterly jobs report is due soon after and a mere 0.6% uptick in hiring is eyed. This is weaker compared to the previous 0.9% gain. Also, the unemployment rate is slated to rise from 5.3% to 5.5% which might be bearish for the Kiwi as this could renew rate cut speculations.
There are no major reports lined up from Canada, as the currency has been influenced mostly by oil prices recently. US crude oil inventories are due later on in the week, ahead of Canada’s trade balance and jobs data. A 0.2K increase in hiring is eyed, with the jobless rate expected to rise from 7.1% to 7.2%.
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