EURNZD has trended higher since mid-December, although the pair has been mostly sideways for the last few years.
But that doesn’t mean there aren’t favorable opportunities.
In fact, currency crosses have offered some incredible opportunities recently, including the AUDNZD rising wedge that I discussed on February 10th.
That pattern triggered an initial breakdown of over 200 pips.
And the EURNZD rising wedge below is just as appealing on the daily time frame.
However, a currency cross like this may require a couple of changes to how you approach a setup.
First, EURNZD tends to be choppier than many other pairs, given the relationship the euro and New Zealand dollar share with the USD.
So, a smaller position size and a wider stop may be appropriate.
Second, choppier price action means more indecision, which means longer open position times.
If you’re used to holding a position for a few days or a week, catching a swing trade on a pair like EURNZD may take a few weeks or even a month.
But the reward can be worth the wait, especially if you time your entry correctly.
As of now, EURNZD is holding above wedge support at 1.7000.
So until we get a daily close below that level, this is an unconfirmed rising wedge.
It also means that shorting the pair before then is risky unless you’re waiting for a retest of wedge resistance at 1.7250.
As for targets on a confirmed breakdown, I would closely monitor 1.6860.
Although it’s difficult to tell from the raw price action, 1.6860 is the Point of Control (PoC) for the last year.
The PoC is the highest volume price on a chart, so 1.6860 is a support to watch.
It was also resistance between May and June of last year, adding to the level’s significance.
A secondary target would be the rising wedge inception point of 1.6425.
But remember that a daily close below wedge support is required to activate those targets, which EURNZD still needs to accomplish.