Trade of the Day: NZD/CAD

By: Dima Chernovolov

NZD/CAD continues to fall inside the hourly Down Channel chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Down Channel at the 4-bar level – which is the result of the below-average Initial Trend (1 bar), lower Uniformity (3 bars) and strong Clarity (8 bars). NZD/CAD is expected to fall further inside this Down Channel – in line with the earlier breakout of the key support level shown below.

As can be seen from the daily NZD/CAD chart below, the price earlier broke through the key support level 0.8490 (which also reversed the price twice from the start of this month). This price level is acting as strong resistance level after it was broken.  The proximity of this resistance level and the strength of the active daily downtrend increase the probability NZD/CAD will continue to fall inside this Down Channel.