NZD/CAD traded higher on Tuesday, after it hit support at 0.8510 on Monday. At the time of writing, the bulls are trying to overcome the 0.8575 barrier, which is Friday’s high, but also the upper end of the sideways range that contained most of the price action from April 8th until today. So, having that in mind, we will adopt a cautiously-bullish approach for now.
If the bulls are strong enough to close the current 4-hour candle above the upper end of the pre-discussed range, then we may see them climbing towards the 0.8635 level, which is marked as a resistance by an intraday swing high formed on March 12th. They may decide to take a break after testing that zone, thereby allowing a correction lower. However, as long as such a retreat stays above the upper bound of the range, we would see decent chances for another leg north. This time, the 0.8575 territory may get broken, which is likely to set the stage for advances towards the 0.8700 area, near the high of March 11th.
Looking at our short-term oscillators, we see that the RSI edged up and now appears ready to challenge its 70 line, while the MACD, already positive, has just poked its nose above its trigger line. Both indicators detect accelerating upside speed and support the notion for further advances in the near term.
In order to abandon the bullish case, we would like to see a decent dip back below 0.8510, which is yesterday’s low. Such a move may signal that traders want to keep this pair trendless for a while more and may initially target the inside swing high of May 19th, at 0.8484. Another break, below that zone could extend the slide towards 0.8450, the break of which may set the stage for the low of that day, at 0.8412, or the lower boundary of the aforementioned range, at 0.8390.
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