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Just yesterday I wrote about a potential NZDCAD selloff this week.
The pair had carved a bearish pin bar on the weekly time frame after failing to retake the 0.8870 level last week.
Furthermore, there was an ascending channel here that complimented the idea of an imminent breakdown.
If you look at the 4-hour chart, you’ll notice that NZDCAD cleared channel support before the weekend.
We were discussing this idea in the member’s area on Sunday.
One thing I pointed out to members is how the measured objective (if we treat this as a bearish flag) lines up with the 2018 low.
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In fact, both are exactly 590 pips.
I’m referring to the year-to-date range. That’s from the high at 0.9281 and the low at 0.8691.
If we then subtract that same 590 pips from last week’s high at 0.8920, we get 0.8330, which is the closing price of the 2018 low.
See the chart below for an illustration.
It’s incredibly rare to find an objective of a potential flag pattern that lines up with a multi-year low with such precision.
So what does all of that mean for NZDCAD?
In my opinion, it means the pair is likely headed for the 2018 low (closing price) at 0.8330.
And as anticipated, sellers are off to a fast start this week.
As I wrote in yesterday’s weekly forecast, the first test for NZDCAD on the way down is the year-to-date low at 0.8690.
That’s also the inception point of this potential bearish flag.
A close below that would open the door to the next key support in the 0.8510/30 area.
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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