Stronger-than-expected labor market numbers from New Zealand helped drag EUR/NZD much lower today.
Will this lead to the pair finally breaking below its uptrend pattern?
In case you missed it, New Zealand’s labor market numbers showed the unemployment rate rising from 3.9% to 4.0% in Q4 2023. Luckily for NZD bulls, employment also grew by 0.4% (from a 0.1% dip in Q3) and wage growth accelerated from 0.8% to 1.0% for the period.
Meanwhile, the euro didn’t get much support from relatively better-than-expected Euro Area PMI releases yesterday.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro and the New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/NZD 4-hour Forex Chart by TradingView
Will today’s headlines inspire EUR/NZD to break its uptrend pattern?
Take note that EUR/NZD is currently playing around the ascending channel support in the 4-hour time frame. Not only that, but the pair is close to the S1 (1.7640) Pivot Point line as well as the 200 SMA support in the chart.
And if that doesn’t look bullish enough for ya, the pair also looks like it’s sporting a bullish divergence!
A few more bearish candlesticks could support a downside breakout and draw enough sellers to drag EUR/NZD to potential inflection points like 1.7600 or 1.7550.
But what if we’ve seen the last of EUR’s weaknesses this week?
If market headlines and fundamental drivers lead to EUR-buying or NZD-selling instead, then you’ll want to watch out for consistent trading back above the S1 and channel support.
The 1.7700 psychological handle and 1.7730 Pivot Point line could make for good targets if EUR/NZD sees sustained bullish pressure.
Good luck and good trading this one!