The New Zealand dollar versus the Canadian dollar currency pair did not manage to sustain the gains above the 0.8344 level.
The market is in a descending trend that began at 0.9281. At the beginning of September, the price showed signs of trying to bottom around the 0.8300 psychological level.
The first sign of a potential bottoming was given by the strong retracement on August 30. The second one is represented by the low at 0.8236, a price from where the market quickly recovered via the bullish engulfing pattern printed on October 2. The resulting rally made a new higher high in relation to the previous one (the high of September 25), this being a third reason to believe that the bulls are trying to recover.
But the fact that the price got again under 0.8344 can be considered a double-edged sword. On one hand, the fact in itself that the price is under weekly support is prone to attract more sellers. On the other hand, this is the chance for the bulls to print a higher-low in relation to 0.8236.
Since, for the long term, selling from this area is not such a good idea from a value perspective — it would mean selling the lows — buying could be a good option. But both orders depend on how the price will react to the 0.8344 level. If the market fails to reconquer 0.8344 — falsely pierces it — then the first target is represented by 0.8200 (not highlighted on the chart). If the opposite occurs and the price gets above the level and confirms it as support, then 0.8514 is in reach.
The price went under the technical corresponded of the 0.8300 psychological level, 0.8307 respectively. As long as the price oscillates under it, chances are for a revisit of 0.8239 to occur.
But if 0.8307 is reconquered, then a first target is represented by 0.8417, followed by 0.8516, a perspective that aligns with the long-term perspective.
Levels to keep an eye on:
D1: 0.8344 0.8514 0.8200
H4: 0.8307 0.8239 0.8417 0.8516
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