Trade of The Day – NZD/CAD

Facts:

• NZDCAD exchange rate (D1 timeframe): Bounced this week off the lower 14-day Bollinger Band.
• RSI: Has returned from the “overbought” territory (>70) to around the 50 level.
• Bloomberg Forecast: Canada’s annualized Q4 2025 GDP growth is projected at 0.3%.

Recommendation:

• Position: Long (BUY) NZDCAD at market price
• Take Profit (TP): 0.82600 (TP1), 0.83200 (TP2)
• Stop Loss (SL): 0.81100

Source: xStation5

Opinion

Today’s scheduled Canadian GDP report is expected to indicate marginal economic growth (Bloomberg forecast: 0.3% annualized vs. 2.6% previously), driven primarily by government spending in response to the sharp economic slowdown triggered by Donald Trump’s tariffs, general uncertainty, and unemployment nearing 7%. While services remain the final bastion of resilience, a new wave of uncertainty regarding US trade policy could once again weigh on business sentiment.

Structurally, the Canadian economy is balancing on the thin line between a soft landing and stagnation. According to the Bank of Canada’s latest projection, downward pressure on GDP is expected to persist through the end of 2026, and potential growth engines—such as consumer demand, trade, and the housing market—remain far from the recovery needed to support the CAD.

New Zealand has struggled with similar pressure from a weakening labor market; however, a pause in interest rate cuts and recent statements from the RBNZ Governor (“growth without inflationary pressure”) suggest that New Zealand has already entered a recovery phase that Canada has yet to reach.

Geopolitical Risk: A significant risk to this recommendation is a potential escalation of tensions between the US and Iran, which could dynamically boost oil prices (WTI is already testing 7-month highs) and consequently strengthen the CAD. Nonetheless, despite the lack of a breakthrough in the Geneva talks that concluded yesterday, the parties declared progress and a willingness to continue dialogue in Vienna next week. This is currently preventing markets from fully pricing in a full-scale conflict scenario.

Methodology

This recommendation was prepared based on technical analysis of the NZDCAD chart and fundamental analysis of the respective economies (monetary policy and macroeconomics of Canada and New Zealand). The direction was determined using moving averages, Bollinger Bands (specifically the bounce from the lower 14-day band), and market expectations regarding economic conditions in both countries.

Take Profit and Stop Loss have been determined using Price Action methodology and Fibonacci retracements. TP1 is set at the 100.00 Fibo level (the most recent high), TP2 at the peak from July 2025, and SL at the 50.0 Fibo level. Key support levels are identified at the 78.6 Fibo level and the lower Bollinger Band, which currently coincides with the 50-day Exponential Moving