NZDCAD Top-Down Analysis

2020년 10월 12일

Hello Traders,

Here is the Top-Down Analysis of NZDCAD (Monthly, Weekly, Daily for direction and 4H for entry) for

Week 42 - 12 Oct

M > Market is moving in a downward channel, price dropped from resistance level of the channel completing the W formation.

W > Price dropped to test monthly support, faced rejection and moved to test weekly resistance. Price also has support of rising trend-line.

D > We can see formation of H & S pattern, hence we expect bearish movement. Price had dropped out of support trend-line but moved back in and is now testing daily support now turned resistance.

As per COT NZD had closure of few Long and major Short increasing net positions, confirming strength of ZXY for the said week. Short positions have reduced to least in current year. ZXY has been gaining strength slowly since June 2020. ZXY improved its position last week. CAD saw closure of Long and more Short positions with Short positions reducing to least for current year, slighting improving net positions. N-R saw closure of Long and addition of Short, in effect reducing cumulative net positions to further -ve. However CXY gained strength for the said week and was much more strong last week.
Currently ZXY is gaining strength and so does CXY, for bearish move of NZDCAD ZXY needs to weaken and CXY needs to strengthen. Hence we have to be cautious while taking Short trade.

4H > Price has created W formation and we expect a drop to test the neck. We will monitor price action for entry from there, Short or Long. For long term we will continue to have bearish bias.

Pair Correlation > NZDCAD has positive correlation with NZDCHF, AUDCAD, AUDUSD and NZDUSD and negative correlation with EURNZD, GBPNZD and GBPAUD.

This was my Idea and I hope you find it useful. If you find the analysis of help please leave a LIKE and FOLLOW for receiving all updates during the week. In the comment section share your view or ask questions.

Thank You
AP17FX