The Euro was seen trading lower against most of its counterparts, including the New Zealand dollar. The Euro is one of the worst performers of the day, as it was trading below yesterday’s low compared to other currencies, which managed to recover some of the lost ground.
The EURNZD pair has breached an important confluence support area, which means that the chances of more losses are quite high in the short term considering the current market sentiment.
There was a confluence of two trend lines around the 1.5500 support level, which was breached by the Euro sellers earlier. The EURNZD pair has even pierced the 61.8% fib retracement level of the last move higher from the 1.5411 low to 1.5627 high. So, it looks like the pair might continue trading lower in the coming sessions. However, there is a chance that the pair could retest the broken trend line support area, and if that happens, then the Euro sellers are likely to reappear. The 1.5500-10 area might act as a hurdle for the pair moving ahead. The hourly RSI is bouncing from the extreme level, which means the chances of this scenario is very high.
It is also possible that the pair might not retrace from the current levels. In that situation, initial support can be seen around the 76.4% fib level at 1.5460. Any further losses should take the pair towards the last swing low of 1.5410.
The RBNZ interest rate decision is one of the most important events lined up in the coming Asian session, which might affect the EURNZD pair to a great extent. So, keep a close eye on the mentioned event.
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Posted By Simon Ji of IKOFX
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