NZD/USD: RBNZ Toughens Verbal Intervention, Head & Shoulders In Play

DailyFX Table

Ticker

Last

High

Low

Daily Change (pip)

Daily Range (pip)

USD/CAD

1.2537

1.2663

1.2525

138

The Canadian dollar outperforms its major counterparts as the region’s 2Q Gross Domestic Product (GDP) report showed the economy expanding at the fastest pace since 2011.

The ongoing series of better-than-expected data prints may encourage the Bank of Canada (BoC) to adopt a more hawkish tone a the September 6 interest rate decision, and the shift in USD/CAD behavior may continue to unfold throughout the remainder of the year should Governor Stephen Poloz and Co. increase their efforts in preparing households and businesses for higher borrowing-costs. In turn, USD/CAD may face range-bound conditions going into the BoC rate-decision, with the pair at risk of giving back the rebound from the monthly-low (1.2443) if it fails to preserve the series of higher highs & lows carried over from the previous week.

USD/CAD Daily Chart

USD/CAD Daily Chart

USD/CAD may snap the bullish sequence from earlier this week, with the pair at risk of facing range-bound conditions as it struggles to hold above the Fibonacci overlap around 1.2620 (50% retracement) to 1.2640 (61.8% expansion).

A move back below the 1.2510 (78.6% retracement) region may spur another run at near-term support zone around 1.2410 (100% expansion) to 1.2440 (23.6% expansion), which lines up the 2017-low (1.2413).

The Relative Strength Index (RSI) suggests a larger recover could be underway as it clings to the bullish formation carried over from late-July, but failure to preserve the upward trend may generate fresh lows in the dollar-loonie exchange rate as USD/CAD turns around ahead of the monthly opening range.

Ticker

Last

High

Low

Daily Change (pip)

Daily Range (pip)

NZD/USD

0.7152

0.7210

0.7132