Market Forces Push NZD/CAD Higher, But Resistance Looms

By Tomasz Wisniewski|

Published: May 22 2024, 05:18 GMT+0

Market Forces Push NZD/CAD Higher, But Resistance Looms


In today’s analysis, we focus on the New Zealand dollar to Canadian dollar (NZD/CAD) pair, which has been significantly influenced by recent economic events. Yesterday’s lower-than-expected inflation data for Canada and today’s hawkish remarks from Reserve Bank of New Zealand Governor Adrian Orr have pushed the pair higher. Orr’s comments on interest rates and inflation, despite rates remaining unchanged, were influential.

These fundamental events have driven the NZD/CAD to new monthly highs, aligning with the buy signal triggered a few days ago when the price broke out of a symmetric triangle pattern marked by green lines. However, the price has now encountered a critical horizontal resistance marked in yellow, just below 0.84. This resistance level is crucial; as long as the price remains below this yellow area, there’s uncertainty about further upside potential.

Sellers might consider a bearish correction if the price struggles at this resistance. Despite the bullish breakout from the triangle, the key resistance poses a challenge. A potential shooting star pattern on today’s candle could indicate an invitation for a bearish correction. Vigilance is essential as we observe the price action over the next few days.