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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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The EURNZD has spent the last two weeks consolidating above a level that extends from the December 2017 high. Even the 4-hour chart shows how the level has directed price action since early March.
However, earlier today sellers won the battle.
We also have a second trend line that intersects the first at 1.6940. This one extends from the current 2018 low at 1.6521.
So far we have a 4-hour close below the first trend line at 1.6960. It appears we also have a break of the second at 1.6925, although it’s a much closer call.
When you combine these two levels, we have an area that could offer a favorable selling opportunity.
That said, one observation that requires some patience is today’s intraday move. Today’s session has already stretched itself over 200 pips, which is above average for the last few months, so waiting for a retracement into 1.6925 wouldn’t be a bad idea.
I would also like to see a daily close (using a New York close chart) below the 1.6925 area before considering an entry. Currency crosses such as the EURNZD often demand additional confirmation, particularly during a holiday week when volume is lacking.
The setup would materialize on a daily close at 5 pm EST below the 1.6925 area. I’ll then need to see a retest of the 1.6930/50 area as new resistance.
Key support comes in at 1.6755 followed by 1.6640 and 1.6450. Keep in mind, however, that the pair could also catch a slight bid at 1.6840.
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