NZD/CAD technical analysis: potential buy opportunity as the price breaks a key resistance

By:
on Feb 9, 2024
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  • NZD/CAD broke and closed above a key resistance level recently
  • The price will possibly reach the 0.83800 resistance level in the coming days
  • I would recommend watching this trade while unemployment data is published on the Canadian dollar today

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NZD/CAD trading strategy

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  • Buy/sell asset: Buy NZD/CAD
  • Entry price: 0.82350
  • Stop loss: 0.81850
  • Leverage: 1x
  • Take profit 1: 0.82800
  • Take profit 2: 0.83300
  • Take profit 3: 0.83800
  • Timeframe: 1-2 weeks
  • Maximum profit: 1.7%
  • Maximum loss: 0.6%

NZD/CAD chart and technical analysis

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NZD/CAD has been in a bearish trend for the last 3 months. However, recently the price broke the bearish channel and closed above a key resistance of 0.82350. This indicates the price is likely to turn bullish in the coming days.

The price will likely make a correction and will retrace back to the 0.82350 level which now will act as a support. I am expecting the price will continue its bullish momentum from there and will go for new highs from the 0.82350 support level.

The market structure has also turned bullish and the price has formed a bullish reversal head and shoulder pattern, which indicates a potential bullish trend ahead. The price has also formed healthy bullish candles with imbalances from where the price will likely go upward.

NZD/CAD fundamental analysis

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Fundamentally, the unemployment news is due today on the Canadian dollar. If the data turns out positive the price of NZD/CAD will drop and if the data turns out negative then the price of NZD/CAD will likely go up.

Moreover, the New Zealand dollar is likely to go bullish in the coming weeks and the government has vowed to increase the interest rates.

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New Zealand dollar to Canadian dollar trade idea takeaways

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  •  NZD/CAD broke and closed above a key resistance level recently.
  • The price will possibly reach the 0.83800 resistance level in the coming days.
  • Multiple take-profit levels have been added to secure profit along the way.
  • The risk-to-reward ratio on this trade is 1:3.
  • The entry and stoploss prices have been placed at secure levels with the least probability of getting hit.
  • Good luck!
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