Tags: Currency Forecast | NZD/CAD | Technical analysis | Trading

The  NZD/CAD bull trend we've seen over the past 9 months may be facing a potentially strong bearish correction over the next few weeks. Prices recently reached major resistance near .79 as defined by the following Fibonacci/geometric pattern convergence...

•  161.8% of X1-A1
• 200% of X2-A2
• 161.8% BC
• bearish butterfly complete at D
• bearish 3-drive pattern complete at D

This may not necessarily result in a total trend reversal, however, the odds of a correction down to 8hr bull trendline support increase. Prices have already begun to drop, but are relatively close to bearish pattern completion. Considering risk/reward we've decided to enter short at current levels (.7793) with stop-loss at .7876. The first profit target sits at .7695 (T1) just above would-be 8hr bull trendline/61.8% support. Because of the potential 3-drive pattern, the final target of .7380 (T2) is set just above 61.8% support  (gray) of the entire 8hr uptrend (note: this is also the CD leg on weekly) at which point we also have some Fibonacci support convergence (161.8% of most recent 8hr upswing, in blue).

Potential Strategy: Sell at market (.7793) risking .7876 targeting .7695 (T1), .7380 (T2)