FxWirePro: NZD/CAD recovery capped at 5-DMA, bias lower, stay short

• NZD/CAD upside remains capped below 5-DMA, trades 0.26% lower on the day.
   
• Renewed concerns over the New Zealand political scenario to keep kiwi under pressure.
   
• Nationalist Party leader himself dropped a self-imposed deadline of Oct. 12 to announce the new government.
   
• Recovery lacks traction, momentum studies on the pair are bearish and support further downside.
   
• We see scope for test of major trendline support at 0.8770. Violation there could see further downside.
   
• On the flipside, we see bearish invalidation only above 20-DMA at 0.8939.

Support levels - 0.88, 0.8776 (Sept 14, 15 low), 0.8770 (major trendline)

Resistance levels - 0.8876 (5-DMA), 0.8939 (20-DMA), 0.8980 (23.6% Fib retrace of 0.9758 to 0.8740 fall)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-NZD-CAD-Trade-Idea-934026) has hit TP1/2/3.

Recommendation: Bias lower, hold for 0.88/ 0.8776/ 0.8765

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -105.023 (Bearish), while Hourly CAD Spot Index was at 60.9947 (Neutral) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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