In the past couple weeks, we’ve seen several commodity currency crosses such as the EURAUD and GBPNZD trend lower. In fact, I just provided an update on the GBPNZD yesterday, and already the cross is down another 70 pips.
One that I haven’t mentioned is the EURNZD, at least not publicly. I did, however, point out a potential short in the member’s area when the pair was trading above 1.70. The pair hit our target today for a profit of just under 300 pips.
However, for those who missed the earlier opportunity to short this, the EURNZD is in the process of testing channel support at 1.6740. At the moment, we have a 4-hour close below the level, but I’m waiting to see what the daily time frame does.
That involves waiting for the New York close at 5 pm EST. If the pair closes the day below that 1.6740 area, we could see this two-week selloff continue.
Key support below it comes in at 1.6640 followed by 1.6450 and 1.6240. I’ll be the first to admit that the horizontal levels here aren’t nearly as precise as the EURAUD. In fact, the pair has stair-stepped nicely on those levels I pointed out on May 16.
That said, I do think the levels above will be significant if tested as support. But until we get the all-important daily close at 5 pm EST below 1.6740, there isn’t much to do here in my opinion.
As a side note, the EURNZD is approximately 40 pips away from carving a bearish outside month. That alone could be worth tracking if it materializes within the next few days.