The NZDCAD is trading within a corrective pressure, where the ongoing fundamental development from CAD and crude oil could affect the pair's price.
Why Is NZD Under Pressure?
The New Zealand Dollar is under pressure due to growing expectations that the Reserve Bank of New Zealand (RBNZ) will cut large interest rates next week.
On November 27, ANZ analysts predicted the RBNZ would cut interest rates by 50 basis points (bps). Next week, we anticipate a 50 bp drop to 4.25%. That would align with market pricing, analysts' projections, and the RBNZ's October communication. According to ANZ analysts, although there has been conflicting data as of the October Fiscal Policy Review, no data appears likely to disappoint the apple cart.
What's for the CAD?
Investors are still concerned about the reduced demand for fuel in China, which is the second-biggest buyer in the world. Furthermore, predictions of a worldwide oil glut should limit any significant increase in the commodity's value.
Additionally, profits for the Canadian dollar (CAD) should be limited due to rumors of greater aggressive policy alleviation by the Bank of Canada (BoC).
Volatility In The Energy Sector
Amid reports that the United States is permitting Ukraine to use long-range missiles supplied by the United States to launch an attack deeper within Russia, crude oil prices have recovered from a two-month low shortly before Monday.
In addition, growing conflicts in the Middle East provide some support for the black liquid and raise worries about possible interruptions in the oil supply. This then supports the commodity-linked Loonie.
NZDCAD Technical Analysis
In the daily chart of NZDCAD, the broader market momentum is corrective, where the current price hovers within a descending channel. Primarily, the aim for this pair is to look for a bearish continuation opportunity as the current price hovers within the channel.
On the other hand, the 50 day Exponential Moving Average with the Moving Average is above the current price with a bearish slope. It is a sign of sellers' presence in the market, which could work as an additional bearish signal.
Based on this outlook, the price is more likely to aim lower and find a support from the 0.8182 level. However, any rebound from the 0.8182 to 0.8119 zone with a daily close above the 50 day EMA could open a conservative long opportunity. Also, any immediate bullish rebound with a channel breakout could provide another long opportunity, aiming for the 0.8434 level.
On the bearish side, an immediate upward pressure with a bearish rejection from the channel resistance could be a continuation opportunity. A bearish daily candle below the 0.8119 level could be an immediate short opportunity, aiming for the 0.8000 area.
