Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action. Any other charts can produce false signals.
The NZDCAD is approaching a confluence of resistance at 0.8500.
It’s the intersection of a key horizontal level and the descending channel top that extends from the year-to-date high in March.
This is a pattern I mentioned to members on October 2 when the pair was trading just above the channel floor at 0.8320.
Here’s what I wrote in the member’s area on October 2.
You can see how buyers struggled to push the price higher throughout October.
However, November’s price action looks more constructive, at least so far.
Notice too how the NZDCAD is coming off a long-time support area at 0.8280 that dates back to August 2015.
For now, that 0.8280 support region is holding.
But don’t dismiss the lower highs from NZDCAD since November 2016.
See the weekly chart above.
Those lower highs may suggest weakness that could lead to an eventual break below range support at 0.8280.
That said, I would be surprised if NZDCAD broke down without another push higher first.
Just look at how aggressive the rallies were in late 2017/early 2018 as well as at the end of 2018.
Both of those bull moves ran for more than 800 pips.
We’ll see if NZDCAD buyers can do it again, but they are going to have to take out the confluence of resistance at 0.8500 first.
That’s an essential component of the bullish scenario.
Until the pair closes above 0.8500, the area is intact as resistance and, as such, will attract sellers.
A daily close above 0.8500 would expose 0.8640 and perhaps 0.8760.
Alternatively, bearish price action such as a pin bar or engulfing candle from 0.8500 resistance would keep sellers in control a while longer.