In times of uncertainty and rapidly changing risk avversion in the market, it’s best to trade pairs that have a similar exposure to risk. This will limit external influences in the price action and technical analysis becomes more effective. One of these pairs is the NZDCAD. Recently, the canadian dollar has enjoyed a nice rally, fueled by an optimistic central bank. However, the data last week showed a deterioration in the job conditions in Canada, therefore I started looking for a pair to short CAD. Considering the likelihood of a correction in NZD as noted also for the pair EURNZD, I decided to have a look at the NZDCAD pair.
As we can see in the chart, on friday we broke the downtrend in NZDCAD and I now expect the price action to test again that trendline. In case of a bounce it would be a good opportunity to get long on this pair.
Further details are in my latest video:
Good luck trading!!
