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EURNZD Makes a Strong Case for a Push Higher

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EURNZD has been one of those pairs that couldn’t seem to catch a break lately. Over the last two months the pair managed to lose nearly 1,700 pips. But that may be about to change.

The pair seems to have finally gained some traction during yesterday’s session. But before we get into the details of the setup, let’s first take a look at where this move began and why. A look at the monthly provides clarity.

EURNZD monthly chart:

EURNZD monthly forex chart

As you can see from the chart above, the pair has recently come into strong support that dates back to July of 2000. This level has acted as support on three other occasions over the last fifteen years.

Although this is a strong support level, it isn’t nearly enough to justify buying this market given the bearish momentum over the past six years.

To further the idea that EURNZD may see higher prices in the days ahead, the pair formed a bullish pin bar on the daily time frame during Monday’s session. We (Daily Price Action members) passed on this setup due to the fact that the pair was still contained inside a descending channel that has been in place since early February.

EURNZD daily chart:

EURNZD bullish pin bar on the daily time frame

Now that the pair appears to have broken free from this channel, we can begin looking for buying opportunities on pullbacks to support. From here I would like to see the 1.4360 level hold on a daily basis.

The upside shows multiple targets, the first one being 1.4527. These levels may provide us with an opportunity to pyramid should the bulls get behind this move. Each level, however, will require a daily close above it to justify adding to an existing long position. The final target is 1.4970, which is the previous multi-year low set in 2012.

Summary: Opportunity to treat any pullbacks on the 4 hour chart as a buying opportunity. Key resistance levels can be found at 1.4527, 1.4772 and 1.4970.

EURNZD descending channel on the 4 hour chart

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