Commodity currencies have turned bearish this week after trading on a bullish trend for quite some time. They should have been even more bullish after China and the US agreed to work together on a trade deal and end the trade war soon, but the sentiment has turned negative because the market wants concrete steps before coming to the conclusion that Donald Trump will end the trade war with China.

The Canadian Dollar has another reason to be bearish. OPEC looks uncertain about deciding to cut the Oil output, so the CAD has lost quite some ground this week, while keeps marching higher. Although, the NZD seems the strongest of the pack.

NZD/USD has indeed turned bearish, but it has only lost 100 pips from top to bottom, while the other two peers have lost around 200 pips. But, this bearish move seems exhausted in NZD/USD. This pair is severely oversold on the H4 chart as stochastic shows.

Besides, the 50 SMA (yellow) is providing support right now. The previous candlestick closed as a small doji, which is a bullish reversing signal after the decline. After all, the trend is still bullish and today’s move is just a retrace of that trend.

The 50 SMA has provided solid support before so it is likely that we see a bullish reversal from the 50 SMA soon, or at least a decent bounce off it. For these reasons, we went long on NZD/USD, and now comes the waiting game.