Short-term Trading Idea FX NZD/CAD – Bull Speculation: Double Bottom

Trading opportunities for currency pair: negotiations in Doha have collapsed. From trade opening on Monday, oil has fallen to $41 per barrel, the NZD is up to 0.8945 against its Canadian counterpart. A double bottom and bull divergence has formed on the daily graph, as has happened on 23rd March earlier this year. Based on these two signals, a strengthening of the NZD to 0.9056 and then to 0.9162 is expected.


The last NZD/CAD idea I made came out on 12th October. I expected to see a return of the Kiwi from a 0.8730 maximum to 0.8490. The idea turned out a loss making one. The New Zealander only started weakening from 0.90. Then the NZD/CAD rose from 0.8583 to 0.9571 due to oil prices falling.

NZD/CAD Weekly Graph

Brent has risen from a 27.08 USD minimum by 65.8%. As a result, following a bounce from 0.9571, a strong resistance zone formed. Before OPEC convened (17th April) to talk about freezing output, the Kiwi was reaching for the support at 0.8770.

Monday”s trades opened sharply down. A barrel of Brent fell 4.6% to $41.04. Sunday”s talks in Doha led into a dead end. The main reason for this was the lack of an Iranian representative present. The next OPEC meeting will take place in Vienna in June.

The NZD/CAD is trading at around 0.8945 against Friday”s 0.8863 close. The current growth is +82 points. On the daily we have a double bottom and the unsuccessful OPEC negotiations. By June the NZD/CAD is able to return to 0.9162 (50% from 0.8752 to 0.9571) due to falling oil prices.

NZD/CAD Daily Graph

Trades on Friday closed at around 0.8863 with Brent at $43.01. Here I noticed the double bottom and a candle pattern indicating bull divergence. The same situation can be seen in the candle combination on 23rd March.

With the talks in Doha down and out, oil fell to $41. This meant the NZD could strengthen against the CAD to 0.8945. Taking the factors listed into account, expect a strengthening of the NZD to 0.9056 and then to 0.9162.

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Source:: Short-term Trading Idea FX NZD/CAD – Bull Speculation: Double Bottom

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