Good afternoon team,
We are looking to take a short position on the NZDCAD due to a number of technical factors.
NZDCAD Monthly Charts
Descending channel is providing resistance. August’s monthly candle opened and closed inside the month previous creating an inside bar, when found at resistance reversals can occur.
NZDCAD Daily Charts
There has been a shooting star/ inverted hammer candle at a key resistance zone suggesting sellers are stepping into the market.
NZDCAD 4 Hour Charts
There has been a trend line breakdown followed by a retest on the 1 hour time frame. There is also a potential head and shoulders formation in play on the shorter term time frames.
Trade Setup: SELL Market Execution, current price 0.8830, stop loss 0.8861 and take profit target 0.8780.
Stop loss: 31 pips
Take profit: 50 pips
Keep in mind…
NZDCAD 15 Min Charts
The NZDCAD could be setting up for a head and shoulders formation. The left shoulder line can be found at 0.8850 which is also the 23% fib retracement. If the market pushes higher towards that zone, that will be an optimal entry point for a second position.