The NZD/CAD currency pair is an intriguing pair that is influenced by a variety of variables. While the CAD is impacted by the oil industry, the NZD is influenced by agriculture. One point is for certain — the value of the NZD/CAD pair has gone up and down on a regular basis for a while. There are many things you must do in order to improve upon your profit potential when using this pair.
Check the Fibonacci Totals
A Fibonacci retracement is always possible when it comes to the NZD/CAD. This was especially the case in October 2016 when the Fibonacci retracement was fulfilled.
Notice on this that the currency was starting to decline at a consistent rate in accordance with the Fibonacci bands. After falling down following the first few, the currency went well below the halfway point. This was very easy to predict when the Fibonacci bands are considered.
It especially becomes clear that up and down trends are commonplace with the currency pair. Take a look at the totals for the pair during the month of November 2016:
Notice how after a period of time, the Fibonacci totals worked in some substantial increases but then the decline Fibonacci retracement started to come about in increments. This is consistent with the general projections that can be made over how a currency moves according to the Fibonacci calculations.
This works well for short and long term trades alike. Be aware of the risk that you may undertake when working on a longer term trade, though. The reward could still be high if you are cautious and observant.
What About Struggles At a Line?
There can always be times when the currency struggles to move at a Fibonacci retracement line. This example from 2014 shows the pair as it has a tough time getting out of the 50 percent line.
The pair appears to be stuck in a pattern where it is not willing to move beyond that 50 percent line. It will keep on moving at the bottom part of the bands though.
It is especially critical to watch the currency as it moves along the second highest and lowest lines. These are points that suggest where a strong impact and change on its value might come about. These are sections that can directly influence what you might get out of the currency pair so be sure to look carefully at how well the pair moves along those bands. If the currency starts to go beyond any of those bands, it might be time to watch your position and see if you should get in or out, depending on the intensity of the change.
In cases like this, you have to look at how long a pair will stick around the band. Look at how often the currency moves to peaks and valleys around the pair. This could make all the difference if you watch for what you’re going to get out of the pair as you are trading it.