NZD/CAD Edges Lower as Buyers Pause Ahead of BoC Meeting and NZ Inflation Data

Market Overview

The NZD/CAD pair entered Wednesday’s European session slightly on the defensive, reflecting a modest pullback after last week’s upward run. Traders are now shifting their attention to two major macroeconomic catalysts—Wednesday’s Bank of Canada (BoC) policy meeting and Thursday’s New Zealand CPI release.

Technical Analysis

On the 1-hour timeframe, NZD/CAD shows signs of a short-term bearish reversal. After a week of steady gains, the pair failed to post a new high, printing a lower high near 0.82516. Price has since drifted toward the lower half of the Bollinger Bands, currently testing immediate support at 0.82163. A break below this level would confirm the loss of bullish momentum and expose 0.82067, followed by deeper supports at 0.81945 and 0.81810.

The Bollinger Bands are tightening, indicating a potential volatility breakout. Meanwhile, RSI has retreated from overbought territory and slipped beneath the midpoint, reflecting a transition in sentiment. MACD has moved below the signal line, suggesting bearish pressure may build if support levels give way.

On the flip side, should buyers reclaim control and drive the price back above 0.82516, it would negate the short-term bearish structure and resume the prior uptrend.

Key Technical Levels

• Resistances: 0.82298, 0.82516
• Supports: 0.82163, 0.82067, 0.81945, 0.81810

Fundamental Drivers

The immediate focus is on the Bank of Canada’s rate decision later today. While markets widely expect the BoC to hold rates steady at 2.75%, the policy statement and Governor Macklem’s press conference will be scrutinised for signals on forward guidance. Hawkish tones could lift the Canadian dollar, adding downside pressure to NZD/CAD.

In contrast, New Zealand’s Q1 inflation data, due Thursday, could offer clarity on whether the Reserve Bank of New Zealand will maintain a restrictive policy stance. Any upside surprise in CPI figures could rekindle buying interest in the kiwi, especially if the BoC underwhelms.

Conclusion

NZD/CAD remains vulnerable to a short-term correction unless bulls reclaim 0.82516. A sustained break below 0.82163 opens the door toward 0.81810.

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