Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
EURNZD reached a critical level earlier this month.
The area just above 1.7100 has served as a key handle since July of last year.
In fact, it’s been a factor to some degree since late 2017.
You can see where EURNZD sold off from this 1.7100 region during the first week of the new year.
So not only is 1.7100 a key horizontal level, but it’s also just below the year-to-date high at 1.7185.
Another reason I like EURNZD is the 800 pip range in the chart below.
The euro cross has traded between 1.6300 and 1.7100 since dropping below it on November 6th of last year.
While you could short the pair around 1.7100 resistance, it’s still a bit risky in my opinion.
The EURNZD is still making higher lows and higher highs.
One thing that could tip me off to an imminent reversal is a close below the trend line that extends from the year-to-date low at 1.6294.
But so far, that trend line hasn’t come under pressure since its inception on April 29th.
However, I do suspect that buyers will want to keep prices above that 1.7000 handle.
In other words, a daily close below it could present a selling opportunity.
Note: the “daily close” refers to the New York 5 pm EST close.
Go here to get access to the same professional Forex charts I use.
Just keep in mind that a cross like EURNZD can be quite volatile. Look no further than the decline between January and March.
With that in mind, it may make sense to book some profit along the way if you do decide to short a breakdown.
One support area to keep an eye on is 1.6730.
Notice how it served as a pivot for EURNZD in March and April. The 1.6730 area is also the 50% retracement of the recent rally that started at 1.6290.
Last but not least, it isn’t a coincidence that I’m short GBPNZD and also have a relatively bearish bias for its EURNZD counterpart.
But so far, GBPNZD is the weaker of the two and closer to its breakdown point.