Today, let’s dive into the price action on EUR/NZD as the action may heat up ahead of top tier catalysts. So, grab your favorite trading mug, settle into your trading chair, and let’s get started!
EUR/NZD: 1-Hour
EUR/NZD 1-Hour Forex Chart by TradingView
First things first, let’s take a quick look back, and we can see that EUR/NZD has basically been on a downhill slide since it hit its peak back in mid-August tagging the 1.8450 mark. That’s quite a drop!
But recently, EUR/NZD seems to have decided to put on its rally cap, picking itself up from the floor around 1.7540, and staging a rally to break the recent falling ‘highs’ pattern seen on the chart above.
So, are the bulls now in control!? Well, here is where it starts to get interesting.
That 1.7725 area is potentially a strong technical zone of interest. Why? Well, it’s like the Clash of the Technical Titans here. You’ve got the falling simple moving averages and the remnants of a previous consolidation-break lower pattern converging at this spot, both of which being arguments that do tend to draw in orders from technical traders.
But wait, there’s more to this story! The market is in the middle of a minor consolidation phase, starting to form a trianglish consolidation pattern at the moment. Traders are probably holding their breath in anticipation of the next major catalyst for the New Zealand dollar – the Reserve Bank of New Zealand’s latest monetary policy decision.
This sets the stage for a potential breakout ahead, and guess what? Both the bulls and bears should be on high alert!
For the bears out there, keep your eyes peeled for a sustained break below the consolidation area, pivot point, and those pesky moving averages. That could be a signal that draws in sellers from all walks of life back into the downtrend if we see a bullish NZD reaction to the big event.
And for the bulls out there playing an immediate break above the triangle consolidation pattern and the 200 simple moving average could be the green light some bulls have been waiting for if the markets get very negative on the Kiwi.
Before we wrap things up, let’s not forget that fundamentals are like the wind beneath the wings of price action. Keep an ear to the ground, folks, because the fundies driving sentiment in EUR/NZD can change the game faster than you can say “pips.”
