Expectations of the movement of the New Zealand-Canadian pair in the coming period

NZD/CAD at the basic level

The New Zealand-Canadian pair fell strongly during this week's trading, as traders were quick to estimate the likelihood of further monetary easing from the Reserve Bank of New Zealand.

Sentiment changed sharply after the Reserve Bank of New Zealand cut the official interest rate by 25 basis points to a three-year low of 3.0% on Wednesday, and lowered the expected minimum official interest rate to 2.55% from 2.85% in its forecast for May.

Markets and most economists now expect at least two more interest rate cuts by the end of the year, with more cuts likely if economic momentum does not improve as the central bank hopes.

The country's exports are also under pressure amid external headwinds, in particular from the 15% US tariffs on goods that came into force earlier this month, which threaten to undermine competitiveness in key markets.

On the other side of the Canadian economy, Canadian inflation data was also released this week, which came out as high as expected.

NZD/CAD at the technical level

The pair retreated strongly yesterday with the release of the decision to cut the New Zealand interest rate, and was able to break the support levels of 0.8115, which has now turned into a strong resistance level.

We expect the pair to continue falling to target the levels of 0.8000 and around and then a final target near the levels of 0.7900.

The best selling areas of the pair will be near the retesting of the resistance level of 0.8110/15.

This scenario fails if the 0.8180 levels break higher.