NZDCAD - Oil Price On The Rise, Could Mean A Bullish CAD!Analysis:
Firstly just by looking at the charts we're able to tell that price is in a downwards trend. We've seen a series of lower lows and lower highs being formed confirming that we are in this downwards trend. We're now approaching a key level that has held as support and resistance multiple times so we expect this to happen again this time around. To add confluence to our area price is about to touch the 50% fib retracement level which we expect sellers to be sat at wanting and willing to enter into short positions pushing price down further. For more added confluence even though our trendline isn't at the area we're interested in it is still key as it shows that price is respecting this downwards trend that we're in, signifying that price is likely to hold the level we're at currently. Fundamentally the NZD is the 4th strongest major currency where as the CAD is the 2nd weakest major currency. This fundamentally really doesn't look good for our setup however if we dig a little deeper we'll see why we actually favour the CAD over the NZD. We have a speculation that oil prices will soon be on the rise again. Now why does this matter? Well Canada is the 4th largest oil distributer in the world meaning that the CAD is very often correlated to oil prices. If we see oil prices rise then so will the CAD. With our speculation on oil it starts to show early signs of a bullish CAD which is why we are bearish on NZDCAD both technically and fundamentally as well.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
