USD/CAD Bearish Behavior To Persist As BoC Alters Policy Outlook

DailyFX Table

Ticker

Last

High

Low

Daily Change (pip)

Daily Range (pip)

NZD/USD

0.7319

0.7369

0.7247

122

NZD/USD breaks the monthly opening range following the semi-annual Humphrey-Hawkins testimony, but the near-term outlook remains riddled with mixed signs as the pair fails to test the 2017-high (0.7376).

The price action from February may serve as a blueprint as the rebound from the May-low (0.6818) appears to be exhausted, and the resilience in the kiwi-dollar exchange rate may largely unravel over the coming days as New Zealand’s Consumer Price Index (CPI) is expected to slow to an annualized 1.9% from 2.2% in the first-quarter of 2017. Signs of subdued inflation may spark a bearish reaction in NZD/USD as it encourages the Reserve Bank of New Zealand (RBNZ) to keep the official cash rate at the record-low, and Governor Graeme Wheeler may endorse a wait-and-see approach until he departs from the central bank in September as ‘numerous uncertainties remain and policy may need to adjust accordingly.’

NZD/USD Daily

NZD/USD Daily Chart

Chart – Created Using Trading View

Lack of momentum to test the February-high (0.7376) may contain the resilience in NZD/USD; another failed attempt to close above the key resistance-zone around 0.7330 (38.2% retracement) to 0.7350 (23.6% expansion) may undermine the near-term rebound in NZD/USD especially as the Relative Strength Index (RSI) deviates with price and carves a bearish formation.

In turn, NZD/USD may consolidate going into the week ahead, with the first downside hurdle coming in around the 0.7200 (38.2% retracement) handle followed by 0.7160 (61.8% retracement).

Ticker

Last

High

Low

Daily Change (pip)

Daily Range (pip)

USD/CAD

1.2745

1.2771

1.2721