NZD/USD – Is a Correction on the Cards? (Video)

NZDUSD
The NZDUSD and AUDUSD have been very active currency pairs drawing the focus of lots of currency traders recently. There is a lot going on in the technical picture. Craig Erlam, Senior Market Analyst for Oanda highlights the downward channel as the key indicator to recognise. When you such a strong downward trend you are looking for the price action to make new lows. But ultimately if you see the drop off that we have seen in the technical picture since August; you must keep an eye on the momentum indicators. When is momentum going to run out?

The downtrend in the NZDUSD is however levelling out. We are seeing a divergence between the price and the moving averages. We have a slow down of the trend making a new higher low. That would suggest that we may be entering a correction move. If we do see a bounce then the most notable level will be 0.70. A strong round number. Craig expects a larger correction; but the 0.70 level is the initial test.

USDCAD
Moving over to North America we look at USDCAD. This pair is volatile and strongly effected by data releases. Strong risk appetite needed for this pair. The technical picture shows that the pair has been sideways bound since the start of November. Trading range between 1.2925 and 1.27. Resistance around the 50 fib has been key, capping any moves to the upside. While previous support and has capped any moves to the downside.

This chart is looking bearish. Admittedly if it broke above the 50 fib, it would be a strong Bullish signal. But it has stumbled around this level quite a lot and takes away from the bullish technical indicators. Below the 200SMA / 233SMA, double top formation since the start of November. This suggests that we could lower down to 1.2450.

USD/JPY – Yen Dips as US Employment Report Meets Expectations

Are US Equity Markets Losing Their Sparkle?

CAC Dips as Financial Stocks Falter

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Former Craig

Former Craig

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.