Consolidation started on May 13 when NZD/CAD tested a low of 0.8788. The price has been ranging between 0.88 and 0.90 for over a month. Finally, the pair broke the formed double bottom on June 5 even with a weekly close below that major support.
This is a strong signal that NZD/CAD is still under a strong downside pressure and could be ready for the next move down. One of the confirmations is the 50 Moving Average. Recently, MA was rejected acting as a resistance. Another confirmation is the RSI oscillator bouncing off the downtrend trendline.
Consider selling NZD/CAD around 0.8800, which was a major support. Now, it should act as resistance. The target is 161.8% Fibonacci applied to a high and low of the range zone, 0.8824 and 0.9054, which is 0.8624. At the same time, the price could get lower to the psychological level near 0.8600. Only a break above R3 (0.8921) could provide some strength for the pair.
Support: 0.8788, 0.8624.
Resistance: 0.8851, 0.8890,
The material has been provided by InstaForex Company – www.instaforex.com