After getting rejected on its long-term range resistance, EUR/NZD now seems to have its sights set back on testing support.
Will the floor hold again?
Take a look at these inflection points I’m watching on the daily time frame:
EUR/NZD Daily Forex Chart by TradingView
A combination of risk-on flows and relatively upbeat data from New Zealand seem to be propping the Kiwi higher these days while the euro is being dragged south by downbeat CPI reports.
EUR/NZD recently fell through the neckline of a short-term triple top pattern, sending it further south from the long-term range resistance near the 1.8300 handle and closer to testing the key support zone at 1.7500.
Are we in for a bounce or a break soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that the range support is more likely to hold than to break. Then again, EUR/NZD is trading below both moving averages, so these could hold as near-term dynamic resistance levels around 1.7800.
Price seems to be falling through S1 (1.7700) for now, suggesting sustained bearish momentum to the next support zone or a potential breakdown, which could set off a prolonged downtrend that’s the same height as the rectangle pattern.
Just make sure to keep your eyes peeled for either reversal or continuation candlesticks to gauge where EUR/NZD could be headed next.
Whichever way you decide to play this setup, make sure you practice proper risk management and check out our newly launched forex correlation tool!
