The New Zealand dollar versus the Canadian dollar currency pair crystallized the expected lower high, thus staying true to continuing its way to the 0.8400 psychological level.
After piercing the important 0.8692 weekly support on July 31, 2019, and confirming it as resistance on August 07, 2019, the price touched the 0.8514 support level and retraced — in order to consolidate the decline — to 0.8577, confirming the latter as resistance and, by doing so, printing a new lower high (at 0.8600) with respect to the previous high (0.8704) pointed by the confirmation of 0.8692 as resistance.
Given this series of events, the bears are entitled to consider themselves as the ones that mark the current market profile. The situation could evolve, mainly, in two ways.
The first unfolding can be depicted simply as a continuation of the recent series of declines. This would look like so: the first step consists of the price declining and — very important — taking out the previous low that sits at 0.8489. Once that is checked, the second step is for the price to confirm 0.8514 — or the 0.8500 psychological level — as resistance.
The second possibility can take the shape of a bearish rectangle limited by 0.8577 as resistance and 0.8414 (or 0.8400) as support. Once the pattern triggers the continuation of the decline, the first target — which is also valid for the previous discussed scenario — would be 0.8450, followed by the main target, 0.8400, which could extend to 0.8370.
The price is in a downwards move that began at 0.8895. Now, as the price consolidated in an area lined up by 0.8600 and 0.8516, further decline is to be expected. As same as for the daily chart, this decline would eye 0.8450 first.
If the piercing of 0.8516 is rendered as a false one, the decline would — for the time being — only postponed, the expectancy for the bears to try making a new leg down being a valid one.
Levels to keep an eye on:
D1: 0.8577 0.8514 0.8450 0.8400 0.8370
H4: 0.8600 0.8516 0.8450
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