NZD/CAD Slams into Resistance on Thursday - 25 September 2015

The NZD/CAD pair shot higher during the course of the day on Thursday, slamming into the resistance barrier at the 0.85 handle. This is an area that has been important to this marketplace for some time now, and as a result it’s not a huge surprise that the market found that area a bit difficult to get above. In fact, on short-term charts we already are starting to see sell signals in the form of shooting stars. It is because of this, I feel this market is one that you should be selling, not buying.

While the Canadian dollar of course will suffer in general due to the fact that the oil markets are a bit soft, the reality is that Canada has the benefit of being the next-door neighbor to the United States. This of course means that the Canadians at least have the Americans to sell their wares to. On the other hand, the country of New Zealand is very beholden to what’s going on in Asia, which at this point in time is a necessarily a good thing. In some sense, you can think of this as an “Asia versus North America” type of situation.

Downward pressure

On top of all of that, the fact is that the trend is most certainly negative in this pair, and even though we have seen a couple of really good days for the New Zealand dollar, the reality is that the action is just simply a continuation of consolidation that has been the way of this market for about a month.

On top of that, you have to look at the NZD/USD pair, which shows the real relative strength of the New Zealand dollar. While it is looking a bit positive lately, the truth of the matter is that much like in this pair, there is still a significant barrier just above. Ultimately, it’s going to be very difficult for this pair to break out. I am a seller off of the short-term charts.

NZDCAD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.