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EURNZD sellers cleared a key support level on Monday.
I wrote about this ascending channel on Friday. I was relatively bearish given the false break above 1.7120 earlier in May.
Furthermore, the pair was in the process of carving a bearish inside bar pin bar combination.
I mentioned this setup on Sunday as well.
Monday’s breakdown helps solidify the idea that EURNZD is likely headed lower.
Sellers cleared channel support on a daily closing basis and also confirmed the inside bar pin bar setup that materialized last week.
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However, they failed to break the 1.7030 support area that has held for the last two weeks.
It seems the euro nearly matched every uptick from the New Zealand dollar on Monday.
But I still like EURNZD lower.
Friday’s pin bar from 1.7120 illustrates the amount of supply available at higher prices, and Monday’s break of channel support paints a bearish picture.
Still, it’s essential to respect the risk.
Just because EURNZD has broken a few support levels does not mean it can’t push back above 1.7120.
For now, though, the pair will likely encounter sellers at 1.7100/20.
At the other end, a break below 1.7030 would expose the minor support at 1.6930 followed by the key support and target at 1.6730.
I will remain bearish EURNZD as long as that 1.7120 handle remains intact as new resistance on a daily closing basis.
I’m also still short here per my comments in the member’s area last week.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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