NZDCAD found selling pressure at a familiar level following today’s non-farm payroll report. The event was accompanied by key trade and labor productivity figures out of Canada, which gave a substantial boost to the Canadian dollar.
I mentioned the 0.9570 area on August 18th as a level that has capped every advance since 2014. In that commentary, I also pointed out the ascending channel that extends from the May low at 0.8692.
Shortly after its release, the pair found support from the lower boundary of the channel for the second times since its inception, which kept us on the sidelines.
With the 0.9570 handle still very much intact and the emergence of a bearish engulfing day following today’s fireworks, the three-month channel will certainly be on my radar as we head into next week.
The notable event for the New Zealand dollar next week is Tuesday’s GDT price index, which is typically released between 10 and 11 am EST.
As for the Canadian dollar, things could get bumpy on Wednesday at 10 am EST with the Bank of Canada rate statement. The week finishes off with Canada employment figures at 8:30 am EST.
I’ll be watching intently to see how NZDCAD reacts to channel support for the third time. A close below the level would expose the August low at 0.9090. Alternatively, a daily close above the 0.9570 area would turn our attention higher.
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