EURNZD has trended higher since mid-December.
However, a view of the daily time frame since then shows an incredibly clean rising wedge.
The market tested resistance on Friday and again on Monday, and so far, it’s holding.
As long as EURNZD is below resistance at 1.7170, I like the idea of a pullback into support at 1.6950.
But longer-term, a rising wedge like this tends to serve as an exhaustion pattern.
So I’d be careful trying to long EURNZD if we see a retest of 1.6950 support as a daily close below that would be bearish.
The pullback scenario for EURNZD is valid while below wedge resistance on a daily closing basis.
A close above that would begin to change my outlook.
And while many traders will ignore a cross like EURNZD due to its choppy tendency, the key to successfully trading it is patience.
Of course, that’s the key to successful trading in general, but it’s especially true here.
Because despite the sometimes choppy nature of EURNZD, the pair has offered some exceptionally favorable swings in the last two years.
So anyone who got in on the right side and stayed patient came out with a tidy profit.
This is when proper risk management, a wide enough stop to let the market breathe, and patience are especially critical.