- Broad based Loonie strength after overnight's Bank of Canada's surprise rate hike pushed NZD/CAD to 15-month lows at 0.8751.
- Bank of Canada's surprised markets on Wednesday with a decision to hike its policy rate by 25 bps to 1%.
- The pair has taken support at major trendline at 0.8740, we see weakness on break below.
- Technical studies are supporting downside in the pair. RSI nicely converging with price action.
- Break below trendline support at 0.8740 will see test of 0.8584 (Nov 18 2016 low).
- On the flipside, retrace and decisive close above 5-DMA could see minor bullishness upto 20-DMA.
Support levels - 0.8740 (trendline), 0.8610 (Apr 27 low), 0.8596 (78.6% Fib retrace of 0.8234 to 0.9924 rise), 0.8584 (Nov 18 2016 low)
Resistance levels - 0.88, 0.8856 (5-DMA), 0.8880 (61.8% Fib)
Recommendation: Good to go short on break below 0.8740, SL: 0.8860, TP: 0.8610/ 0.8585/ 0.85
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at 84.7364 (Slightly bullish), while Hourly CAD Spot Index was at 116.907 (Bullish) at 0600 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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