NZDCAD climbed to yearly highs in July before hitting resistance at the upper regression channel at 0.9010. The pair had been on an uptrend since a pullback in March when the pandemic took effect.
The higher lows recorded since suggest a bullish bias. The pair is currently trading above the confluence of the 61.8% Fibonacci retracement and lower regression channel.
An attempt to break this level now sees another push to the upside support by a hidden bullish divergence.
With prices engulfed in the Ichimoku cloud, the median regression is now the next target. Following this, another attempt to fresh highs towards the 0.90 region can be expected.
The short-term outlook suggests a brief move to the downside, bringing levels into the cloud.
The previous standard bullish divergence witnessed on the momentum indicator supported a test in the mid 0.87 area.
Current prices failed to hit a double top at the previous high. Therefore, a move lower could occur. However, once the cloud has been entered a bounce can be then expected towards the median regression of the long-term channel.
We anticipate the said level to hold firm due to its confluence with the lower regression trendline and the golden ratio of 61.8%.
