NZDCAD has remained in an ascending channel since March. Currently, we see a drop out of the channel as prices range at the 0.87c handle.
The previous attempt at a fall out of the lower channel at 0.8574 saw prices retrace and move towards the median regression. The pair now looks to another bid at the 61.8% of the 0.9014/0.8353 downside Fibonacci leg.
The recent bearish divergence on the momentum indicator could lead to further weakness at the previous low. However, a bounce at the said level could lead prices towards the downside border of the Ichimoku cloud.
At this level, the pair would trade at the 0.88c/lower ascending channel.
A shorter-term outlook looks at prices trading in a descending channel.
A test at the median regression and the previous low confluence line would confirm that the bias is on the downside. However, a recent bullish divergence suggests that prices may bounce at the said level.
This would bring another attempt to push prices back into the lower border of the cloud. Once the Tenkan/Kijun confluence 0.87240 level has been breached, then bias could shift to the upside.
This would then see a move towards 0.88c, past the confluence long term ascending and short term descending channels.
