NZD/CAD 4H Chart: Rectangle

Since the mid-June the kiwi has been generally outperforming its Canadian counterpart. During this time NZD/CAD has covered the distance from a low of 0.7951 up to 0.8782. However, the currency pair has been unable to extend the gains beyond the latter level—the highest point since the summer of 2005.

Consequently, even though the rectangle pattern usually implies continuation of the major trend, in this case a bullish one, there is a good chance that the upper boundary of the formation will not allow the currency pair to ascend despite the weekly technical indicators giving ‘buy' signals.