Hey all! I know I usually look at trends but today I’m looking at EUR/NZD’s range resistance for opportunities.
Are you seeing the patterns on the 4-hour chart too?
Here’s the chart that I’m looking at:
As you can see, EUR/NZD formed what looks like a Triple Top around 1.7030 and now it’s trading below the key 1.7000 major psychological handle.
1.6900 is a level to watch for me because it has served as resistance earlier this month and it marks the “neckline” of the Triple Top on the 4-hour time frame.
I’m expecting the Reserve Bank of New Zealand (RBNZ) policy decision scheduled tomorrow to move the pair around before and during the release.
My forex friends have told me that the central bank won’t likely make policy changes this week, but they could upgrade their economic projections and maybe even hint at scaling back their asset purchases now that the New Zealand economy has recovered a bit.
Meanwhile, spotty economic releases from the Eurozone have cooled down speculations of a strong, post-lockdown recovery in the region.
If hawkish speculations for the RBNZ drags EUR/NZD below the 1.6900 level, then I’ll keep my eyes peeled for a move to the 1.6800 mid-range levels near the SMAs. I’ll even check the momentum and economic updates to see if EUR/NZD can fall all the way to the 1.6670 range support!
If the RBNZ stays away from any tapering talk, however, then I’ll be ready to bust out my breakout plays and maybe target areas like 1.7100 or 1.7200.
My last but definitely not the least scenario is overall risk-taking suspending EUR/NZD in a consolidation around its current levels.
If the pair doesn’t see much volatility, then I’ll also consider looking for other opportunities this week. Got any ideas on other potential trend or range trades?
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