After a steady uptrend started on September 30, 2014, and continued until the level of 0.9617, NZD/CAD reversed and declined even faster than it climbed up. The fall ended on May 13 hitting the bottom at 0.8790.
NZD/CAD started a correction and faced the resistance at the 23.6% Fibonacci retracement applied to a high hit on March 23 and a low reached on May 13. However, yesterday’s daily close was above the high (0.9038) established near the 23.6% Fibonacci resistance. Now, this level should act as a support with potentially good buying point. Also, the RSI trendline breakout and recent exit from the oversold zone could be treated as an additional confirmation of bullish sentiment.
With all the facts, consider buying NZD/CAD near S1 (0.8986) or on the breakout of the most recent high (0.9054), which could be a safer approach. The target area is located near 62.8% (R3) Fibonacci retracement level and extends slightly higher. This is because the major resistance level is located at R4 (0.9355), which previously acted as resistance as well as support. Only a break below S2 (0.8895) could push the price lower forming a double bottom near S3.
Support: 0.8986, 0.8895, 0.8790
Resistance: 0.9106, 0.9203, 0.9301, 0.9355
The material has been provided by InstaForex Company – www.instaforex.com