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On June 9th, I wrote about an NZDCAD short opportunity.
The pair was in the process of breaking below ascending channel support. Sellers had also defended the 0.8870 resistance area with a weekly bearish pin bar to show for their efforts.
Our first target following that breakdown was 0.8690.
As you can see, the market reached that level on June 19th.
But despite closing the day below 0.8690 on the 20th, the pair closed back above it the very next day.
That was our indication that a bounce was likely.
Sure enough, NZDCAD clawed back 150 pips from the June 20th low.
However, that strength may have come to an end on Monday. Notice the bearish engulfing day which kept the pair below that 0.8790 key area.
I would expect to see sellers defend the 0.8770 area from here.
If they do, we could see NZDCAD trend back toward that 0.8690 region.
On the other hand, if sellers fail to keep the pair below 0.8770 on a daily closing basis, we will likely see NZDCAD challenge recent highs near 0.8800.
Keep in mind that my longer-term target remains the 2018 low at 0.8330.
That won’t change so long as the pair is below 0.8870. You can see why I like 0.8330 as a long-term target in this post.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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