NZD/CAD has been cruising below a descending trend line with its higher highs on the 4-hour time frame.
Will this resistance continue to hold on a pullback?
Take a look at this area of interest spanned by the Fib retracement levels!
NZD/CAD 4-hour Forex Chart by TradingView
Weaker than expected economic data from New Zealand have been propping up easing expectations for their central bank until early 2026, dragging NZD lower against majority of its peers.
On the flip side, some upside surprises in Canada’s inflation reports have prompted market players to doubt the possibility of yet another BOC rate cut.
Is the downtrend still our friend on NZD/CAD?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the New Zealand dollar and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair is in correction mode, pulling higher from the latest lows to hover around the pivot point level (.7940) possibly on its way to test the Fibonacci levels.
The 50% level lines up with R1 (.7990) and is near the .8000 major psychological mark and former support zone. A larger correction could reach the 61.8% Fib at .8020 near the trend line, which could be the line in the sand for a bearish pullback.
Keep your eyes peeled for reversal candlesticks at any of these levels, as a continuation of the slide could take NZD/CAD back down to the swing low or to fresh lows at S1 (.7850).
On the other hand, long green candlesticks busting through the resistance levels could lead to a reversal from the slide, potentially lifting the pair to upside targets at R2 (.8080) then R3 (.8130).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
