NZD/CAD Buy Trade Idea – May 6th 2020

We can see that the price remains above 200 SMA and EMA on the 4-hour and 1-hour charts. At the same time, these MAs were rejected multiple times, which should result in uptrend towards the key resistance near 0.8635 area.


Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.

This analysis was done on MetaTrader 4.

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Trade Idea Details:

NZD/CAD symbol

Type: Bullish

Key support levels: 0.8474, 0.8483, 0.8500,

Key resistance levels: 0.8574, 0.8633

Price Action: On the 4-hour chart, NZD/CAD continues to trade above 200 Simple and Exponential Moving Averages. At the same time, higher highs and higher lows are being printed, suggesting the continuation of an uptrend. Based on the rejection price of the 200 Simple Moving Average we can spot a key support area, which is located between 0.8408 and 0.8424.

NZDCAD 4H Chart May 6th 2020

 

On the 1-hour chart, the downtrend trendline has been broken, and the current price has retraced back to the trendline breakout point, which could be the demand zone. The previously mentioned support area corresponds to the 61.8% Fibonacci retracement, making 0.8474 a key price level. Therefore, as long as daily close remains above this level, NZD/CAD can be expected to continue moving north.

NZDCAD 1H Chart May 6th 2020

Potential Trade Idea: The demand area could be between 0.8482 and 0.8518, from where the price is expected to move up within couple of days. Upside target is a 0.8635 and the stop loss could be placed near 0.8420, although only daily break and close below 0.8474 will completely invalidate bullish outlook. The key resistance and the potential upside target is located at 0.8635, which is confirmed by two Fibonacci retracement levels, 127.2%, and 161.8%.

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