As the cross pair NZDCAD teeters on a multi-year high
unbroken since 2008, this could present bounce traders with a golden
opportunity to sell for the long term.
Not only is the resistance level synonymous with supply sentiment,
as investors who are buying the Kiwi and selling the Canadian Dollar will
inevitably want to realise profits and exit their position based on the logic
that the bounce is 70% more likely than the break, but other technical factors line up to support our
decision to sell.
We also have an overlap of two Fibonacci extensions (1.272
and the 2.0 Fibonacci extension levels), which has given us a ‘Fibonacci
extension cluster. We also have RSI divergence, giving us the extra clue that
the strength between buyers and sellers is starting to tilt in favour of the
bears.
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