NZD/CAD: Levels, Ranges, Targets

To define risk markets and its relationship in currency pairs. EUR/USD and CAD/ZAR since 2008 and to current day trade far in extremes to each other. Remainder currency pairs trade in between EUR/USD and CAD/ZAR. In July 2008, CAD/ ZAR was 6.6113 and rose to 12.2399 for an 84% gain while EUR/USD lost 29% from 1.5990 to 1.0552.

Since July 2015, CAD/ZAR from 9.4955 rose to 12.2399 for a 28% gain while EUR/USD gained 9% from 1.0579 to 1.1569 highs. The overall risk relationship compressed and no longer at far 2008 extremes. Two interesting developments are involved in the EUR/USD and CAD / ZAR relationship.

EUR/USD needs a break of 1.1155 and trades below while CAD/ZAR at 11.1567 trades below its respective break point levels at 11.4833 and 11.6220. Secondly, risk off pair EUR/GBP at current 0.8532 is not only overbought but trades above CAD/ZAR for the first time ever. EUR/GBP trading above never occurred since the 1971 free float, not since 1961 and not since data ended in 1952.
EUR/GBP as a risk off currency pair is never the leader in market risk determination and must eventually trade much lower particularly when 2015 began for EUR/GBP at 0.6993 and rose to 0.8530 for a 1537 pip move and 22% gain.
To see risk on in markets again and EUR/USD trend, EUR/GBP must break 0.8029 and 0.8021, CAD/ZAR 9.4117 and next most overbought risk determinant pair NZD/CAD 0.8636.

NZD/CAD drivers are averages at 0.9134 and 0.9028. From current 0.9521, NZD/CAD is far far overbought and hits the upper Richter Scale at 0.9566. NZD/CAD targets the 0.9270’s area. Next below is 0.9505, 0.9469, 0.9416, 0.9371, 0.9341, 0.9318, 0.9284. The big break occurs at 0.9231 and a break to target 0.9134 occurs at 0.9182.

Overall, markets so far remain in risk off mode until big break points are seen as EUR/GBP, NZD/CAD and CAD/ZAR are in correction mode.

Brian Twomey, Inside the Currency Market, btwomey.com

USD/CAD: Weekly Levels, Ranges, Targets

In USD/CAD, many significant supports exist below and established inside current price due from USD/CAD’s rise from the 2008 crisis. Most vital supports are located at 1.2913, 1.2313, 1.2294, 1.1921 and 1.1767. Currently, USD/CAD trades comfortably above 5, 10, 14 and 16 year averages. The concern and USD/CAD price drivers for the week are located at 1.2913 and 1.3050 from Friday’s 1.3036 close.

USD/CAD’s further uptrend must break not only 1.3050 which is actual 1.3052 but 1.3172. A new upward trend begins however I would begin to look for shorts from middle 1.3200’s to 1.3300 as USD/CAD becomes far overbought.

The next break points to 1.3052 are located at 1.3045, then upon a break 1.3062, 1.3072, 1.3082, 1.3090 and watch closely 1.3110 and 1.3111 as next big vital levels to continue or reverse the uptrend. At 1.3110, vital break at 1.3052 becomes 1.3055 so 1.3110 may become a correction due because the firm uptrend doesn’t begin until a break is seen at 1.3172. Overall, USD/CAD break at 1.3052 places CAD in no man’s land between 1.3052 and 1.3172. I would consider longs at 1.3052 but caution .

To offer the significance to 1.3110, next above 1.3131, 1.3144, tough break at 1.3158 and 1.3159. Why tough break because then 1.3175, 1.3187, 1.3193 and 1.3206.

On the downside and failure to break 1.3045 and 1.3052 above then next big levels are located at 1.3028 and 1.3027. Both not only huge inflections but USD/CAD becomes lost in no man’s land between 1.2913 and 1.3028. The uptrend must begin again at breaks of 1.3027 and 1.3028 and on to 1.3045 and 1.3052. Next levels from 1.3027 becomes 1.2989 and 1.2970. The significance of 1.2970 is a run to crack 1.2913 by 1.2929 and 1.2924. If 1.2913 trades below then 1.2847 and 1.2821.

1.3028, 1.2929 and 1.2913 holds greatest significance to USD/CAD downside because the new downtrend establishes on a break of 1.2799. Overall, USD/CAD is wandering around its significant averages at 1.2913 and 1.3052 and will remain trading around its averages for weeks in the future as extreme sell prices for the week are found at 1.3134, 1.3150 and 1.3232.

Below long extreme prices are located at 1.2798, 1.2766. In the larger extreme scenario, USD/CAD is done at 1.2614, 1.2555 and 1.2511. Above at 1.3329, USD/CAD is overdone. Extreme prices means if those levels trade, price cannot hold nor remain in the territory and must fall back or rise above those levels.

Brian Twomey, Inside the Currency Market, btwomey.com