NZDCAD has formed higher lows connected by an ascending trend line on its 4-hour time frame. Price is gearing up for a test of this support level, which is right around the 50% Fibonacci retracement level.

If support holds around the .8350 minor psychological mark, NZDCAD could resume the climb to the swing high at .8478 or higher. A larger correction could reach the 61.8% Fib at .8309 or the 200 SMA dynamic support closer to the .8300 major psychological level.

Stochastic has been hovering around the oversold region for a while, so turning higher would mean a return in upside momentum. RSI has a bit more room to drop before reflecting oversold conditions, so price could keep following suit until the oscillator bottoms out.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support levels are more likely to hold than to break, and the gap between the indicators is widening to reflect strengthening bullish pressure.

NZDCAD could take cues from the Bank of Canada’s monetary policy decision today, as another interest rate cut is expected from the central bank. A larger 0.50% reduction in borrowing costs could spark a sharper selloff for the Loonie, along with dovish commentary during the press conference or downgrades to economic forecasts.

The oil-related currency could also take cues from the commodity, which is already in selloff mode this week due to easing geopolitical tensions and expectations of lower demand from China. The OPEC+ decision to boost production by 180K barrels per day could also keep global supply elevated, thereby putting additional downward pressure on prices and the Canadian dollar.

The upcoming EIA report could still steer crude oil prices around later in the week, along with the US NFP report that tends to impact overall market sentiment.