Chart Art: Uptrend consolidation on NZD/CAD?

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Volatility for the Loonie is likely to explode this week, making this uptrend consolidation pattern on NZD/CAD one to watch for the short-term.

What kind of technical setups are there to keep an eye on once the Canadian dollar gets moving?

NZD/CAD: 4-Hour

NZD/CAD 4-Hour Forex Chart by TradingView

NZD/CAD 4-Hour Forex Chart by TradingView

If you haven’t yet heard, the Bank of Canada is giving their latest monetary policy statement, potentially bringing in a lot of action to the Canadian dollar this week.

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 this event then be sure to check out our scouting report on the BOC Monetary Policy Statement here!

If you have done your fundies homework, then it’s time to move to the charts!

On the 4-hour chart above, we can see NZD/CAD has been in a steady uptrend all through out November, with buyers ready to step in on every dip.

Recent price action has calmed down a bit, which is actually creating a potential consolidation breakout setup for those who are brave enough to trade during a major news event.

And if you’re a risk taking, fundamental bear, a sustained downside break is the pattern to watch out for before considering working on a risk management plan to express that view.

For those who are a little more conservative, and leaning bullish on the pair due to fundamentals, a sustained upside break of resistance at the major psychological level of 0.8400 is a pattern to watch that could draw in further NZD/CAD bulls.

If the event draws in short-term CAD bulls to break the consolidation behavior to the downside on NZD/CAD, then swing bulls on the pair may want to check out the potential support areas on the chart for bullish reversal patterns before considering a swing long position.

Right around the 100 SMA (which lines up with mid-November consolidation area) is the first strong area of interest for bulls to watch, while a deeper move lower may see the 0.8200 major psychological area retested before bulls step in, as this lines up with the rising 200 SMA and broken resistance-turned-support area back in early November.

But what do you think? We love to hear everyone’s ideas so feel free to drop a comment below and share your thoughts!

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About the Author: Webbey Team

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