NZD/CAD traded higher overnight, but during the European morning, it hit resistance slightly below the 0.8360 barrier, marked by the high of May 5, and then it pulled back. However, it stayed above the upside line taken from the low of May 19, and thus, we will consider the short-term outlook to be cautiously optimistic.
The bulls may retake charge from near that upside line and aim for another test near 0.8360. If they break higher, we could see them pushing up to the 0.8455 territory, defined as resistance by the high of Apr. 27. If they are not willing to stop there either, we may see them pushing towards the peak of Apr. 20, at around 0.8530.
Looking at our short-term oscillators, we see that the RSI turned down and exited its above-70 zone, but the MACD, although it turned down as well, remains above both its zero and trigger lines. Both detect slowing upside speed, but the MACD remains above both its zero and trigger lines, keeping alive the case of a potential rebound soon.
To start examining whether the bears have stolen all the bulls’ swords, we would like to see a clear dip below 0.8223. This could confirm the break below the short-term upside line and may initially target the low of May 20, at 0.8165. If that barrier doesn’t hold, its break could set the stage for more declines, perhaps towards the low of May 19, at 0.8100, or the low of May 16, at 0.8070.