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EURNZD Rips Back Above 1.5450, Targets July High

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A big part of being a good trader is having the ability to stay flexible and never allowing yourself to become attached to a position. However, this flexibility needs to extend beyond managing exposure if you wish to survive.

Nearly two weeks ago I mentioned the potential bullish reversal that was shaping up on the EURNZD 4-hour chart. The pattern came after the pair had carved out what (still) appears to be a significant bottom in July near 1.5120.

While the Euro cross managed to break resistance shortly after the commentary was released, the retest as new support was less than successful. However, I passed on the buying opportunity as I wanted to see it hold the level on a 4-hour basis, a scenario that never materialized.

I also wasn’t keen on entering ahead of the RBNZ rate decision, which took place last Wednesday.

Now that the dust from the event has settled, it appears as though the previous descending channel has shifted, a testament to what a little patience can do.

A look at the daily chart also shows a massive bullish engulfing candle that’s in the process of forming. And while not at a swing low per se, it is a sign that buyers are willing to make a stand above the 1.5450 handle.

From here traders can watch for a daily close above 1.5565 followed by a successful retest of the level as new support. Key resistance comes in at the July high of 1.5837 followed by the June 9th gap near 1.6100.

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EURNZD breakout from channel

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1 comment
margaret says

PATIENCE is my new motivation k’word now. It cannot be over-emphasized. Thanks JB for not only talking the talk but also walking the talk and showing me the pitfalls.

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