The Euro traded close to the 1.5400 support level during this past week against the New Zealand dollar and found buyers. The EURNZD pair consolidated for some time in a small range, and moments ago traded a bit higher to challenge the 100 hourly simple moving average.
However, it would be very difficult for the Euro buyers to gain momentum against the New Zealand dollar, as the later one has shown a lot of strength recently.
There are two bearish trend line on the hourly chart for the EURNZD pair. The first trend line sits just above the 100 hourly SMA, which also coincides with the 38.2% fib retracement level of the last drop from the 1.5584 high to 1.5410. A break above the mentioned trend line might call for a move towards the next bearish trend line, which is coinciding with the 50% fib level.
As mentioned earlier any further strength looks difficult as of now, so there is a chance that the EURNZD pair might fail around the 50% fib level and trade back towards the 100 hourly moving average. If in case, the pair manages to clear the second trend line as well, then it might climb towards the 200 hourly moving average.
Alternatively, if the pair fails to break higher, then the last low of 1.5410 might come into play again. It would be interesting to see whether the pair can manage to break the mentioned support level or not it that happens.
Overall, as long as the pair is trading above the 1.5410 level the chance of a run towards the 1.55 level cannot be denied.
Posted By Simon Ji of IKOFX
Share
