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Short-term Trading Idea FX NZD/CAD – Bull Speculation: Double Bottom

Trading opportunities for currency pair: negotiations in Doha have collapsed. From trade opening on Monday, oil has fallen to $41 per barrel, the NZD is up to 0.8945 against its Canadian counterpart. A double bottom and bull divergence has formed on the daily graph, as has happened on 23rd March earlier this year. Based on these two signals, a strengthening of the NZD to 0.9056 and then to 0.9162 is expected.


The last NZD/CAD idea I made came out on 12th October. I expected to see a return of the Kiwi from a 0.8730 maximum to 0.8490. The idea turned out a loss making one. The New Zealander only started weakening from 0.90. Then the NZD/CAD rose from 0.8583 to 0.9571 due to oil prices falling.

NZD/CAD Weekly Graph

Brent has risen from a 27.08 USD minimum by 65.8%. As a result, following a bounce from 0.9571, a strong resistance zone formed. Before OPEC convened (17th April) to talk about freezing output, the Kiwi was reaching for the support at 0.8770.

Monday’s trades opened sharply down. A barrel of Brent fell 4.6% to $41.04. Sunday’s talks in Doha led into a dead end. The main reason for this was the lack of an Iranian representative present. The next OPEC meeting will take place in Vienna in June.

The NZD/CAD is trading at around 0.8945 against Friday’s 0.8863 close. The current growth is +82 points. On the daily we have a double bottom and the unsuccessful OPEC negotiations. By June the NZD/CAD is able to return to 0.9162 (50% from 0.8752 to 0.9571) due to falling oil prices.

NZD/CAD Daily Graph

Trades on Friday closed at around 0.8863 with Brent at $43.01. Here I noticed the double bottom and a candle pattern indicating bull divergence. The same situation can be seen in the candle combination on 23rd March.

With the talks in Doha down and out, oil fell to $41. This meant the NZD could strengthen against the CAD to 0.8945. Taking the factors listed into account, expect a strengthening of the NZD to 0.9056 and then to 0.9162.

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Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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