Fundamental & Technical Outlook: NZD/CAD

Fundamental Outlook (NZD/CAD)

During the London session, PMI data came in mixed from the Eurozone with the French Manufacturing print missing expectations, while the Services PMI beat expectations. The German Manufacturing PMI came in as expected, while the Services PMI underperformed. Both the Manufacturing and Services PMIs for the EZ printed in line with consensus estimates.

The most significant news event of the day continues to be the comments from RBNZ Gov. Wheeler suggesting there is no need to "rapidly" lower interest rates, and that lowering rates too quickly could result in unsustainable growth.

European equities markets are trading positive coming into the session, and oil continues to see pressure.

In today’s session, we expect the strongest currency to be NZD due to the fresh RBNZ surprise suggesting the RBNZ could remain on hold for longer. This will also make the NZD more attractive as a carry. The current positive equities market is also supportive of the currency.

The weakest currency is expected to be CAD with the oil market continuing to fall from this week's highs.

There is no tier one data for today's NY session, however, we will see New Home Sales from the US.

The NZDCAD pair is currently priced at 0.9450.

There are several levels including the current price level which can be considered for buying opportunities:

The price levels below could be used to buy from as price retraces into them:

0.9200, 0.9380, 0.9355

The price level above that could be used to buy as price breaks:

09576

Source: Jarratt Davis

Technical Outlook (NZD/CAD) Weekly Chart)



Indicators: Bullish (50 sma above 200 sma)

Summary: This resistance zone is extremely critical as it has served as an area where the price has not been able to break above it since 2014. With the short-term bullish bias of this pair, I am expecting the price to test this resistance zone once again.