FxWirePro: NZD/CAD finds major support at 0.87, good to go short on break below

• NZD/CAD is trading in a narrow range on the day, capped below 5-DMA.
   
• Kiwi continues to remain under pressure, is likely to extend weakness in the wake of the electoral results.
   
• The pair has been in a long term bear trend and recovery attempts were rejected at 50-DMA.
   
• Technical studies are bearish, we see scope for further downside.
   
• 0.87 offers strong support for the pair. It is convergence of two major trendlines.
   
• Break below to accentuate weakness. Scope then for test of 0.8610 (2017 lows) ahead of 78.6% Fib at 0.8596.
   
• We see bearish invalidation only on break above 50-DMA currently at 0.8939.
   
• Bank of Canada meeting is the key risk event. Markets expect no change in rates and a dovish message taking into account the latest round of data.

Support levels - 0.8980 (23.6% Fib retrace of 0.9758 to 0.8740 fall), 0.8923 (5-DMA), 0.8880 (Sept 27 low)

Resistance levels - 0.8995 (50-DMA), 0.9084 (Sept 20 high), 0.9129 (38.2% Fib)

Recommendation: Good to go short on break below 0.87, SL: 0.8775, TP: 0.8610/ 0.8595/ 0.8520.

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -139.622 (Bearish), while Hourly CAD Spot Index was at 4.23345 (Neutral) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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