Tuesday’s top story was definitely the RBA not cutting the cash rate in Australia. They put that decision on hold, despite the consensus being that the rate would be slashed. That helped AUD a lot and now the currency is climbing much higher. Usually, when AUD jumps, we have a similar movement on the NZD. This time is a bit different. NZD is not following this path. Actually, on NZDCAD we can see a very good long-term sell signal.
NZDCAD has been one of my favourite pairs for trading occasions for weeks, even months. Here, we are going down driven by the bearish engulfing on the weekly chart along with the double top formation and the false breakout above the downwards trend line. About the double top formation…most recently, we broke the neckline of this pattern and tested that as the closest resistance. That takes away all the arguments from the bulls and opens the way towards the lows from October. That gives us an opportunity for a 550-pip trade. Sweet, right?
Next up is gold, which is taking advantage of the current risk off mode on the market. The price is making a double bottom formation at the end of a wedge pattern. This could be the start of a nice upswing. A buy signal will be triggered if the price closes above the upper red line.
A very similar setup can be found on USDRUB. In fact, this is an example of what can or should happen to gold in the future. USDRUB already broke the upper line of the wedge using the double bottom formation. The buy signal is ON and we should see a further rise.