Daily Price Action
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EURNZD Selloff to Continue Below 1.6800

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The multi-year uptrend for EURNZD looks to have run its course. In fact, the momentum began to slow in December of last year.

Here’s how things look from the weekly time frame:

EURNZD upward sloping flag on weekly chart

Notice how the angle of the uptrend changed in late 2017. Instead of a parabolic move up, the EURNZD rally began to flatten.

We know that bull and bear flags are continuation patterns. They’re nothing more than channels that develop against the prevailing trend.

But what happens when a channel forms with the trend?

That signals a reversal, not a continuation. It’s a formation similar to a rising or falling wedge.

That’s exactly what has happened to EURNZD over the last ten months. It’s been a slow death, but the bullish momentum finally came to an end in October.

We’ve discussed the recent price action quite a bit in the member’s area.

For example, here’s the comment I made in the EURNZD member’s forum when the pair was 800 pips higher at 1.7520:

Charts for EURAUD and EURNZD

The first chart is EURAUD and the second is EURNZD. Both pairs have come under considerable pressure after forming almost identical topping patterns.

So where is EURNZD headed to next?

If sellers can break channel support at 1.6800 on a daily closing basis, it would open up downside targets including 1.6570 and 1.6150.

You’re going to need a New York close chart to determine where the pair closes at 5 pm EST. Go here to get access to the same platform I use.

The latter is the starting point of ascending channel support. When it comes to an upward sloping flag like this, the objective is usually the pattern’s inception point or 1.6150 in the case of EURNZD.

Now, keep in mind that the market is more than 300 pips below its mean. I use the 10 and 20 daily EMAs for this purpose.

Combine that with how volatile a cross like EURNZD can be, and you have a recipe for aggressive bounces along the way.

With that in mind, you don’t want to chase. If you aren’t already short, you’ll probably want to wait for a retracement into new resistance near 1.6800. Entering now would leave you too exposed in my opinion.

Stay patient and wait for the market to come to you. There are more than 500 pips between today’s price and the objective, so there’s no need to rush your entry.

Lastly, the daily close is key here. All of the above rests on the ability of sellers to clear 1.6800 on a daily closing basis.

Important: I use New York close charts so that each day closes at 5 pm EST.

Click here to get access to the same charts I use.

EURNZD support and resistance on the daily time frame

Leave a Comment:

44 comments
Harmony says

You always clarify things that are not easy to be seen🙏 thanks Mr Justin

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    Justin Bennett says

    You’re welcome, Harmony. Glad to hear that.

    Reply
Thomas Boakye says

so wen is the appropriate time for entry(short). And where can I place my stop loss and take profit

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    Justin Bennett says

    I mentioned an idea for the entry and targets in the post. It’s too early to talk about a stop.

    Reply
Steve Ochieng says

Thanks Justin for the indepth and insightful analysis. I have already marked the levels and just waiting for the next course of action.

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    Justin Bennett says

    You’re welcome, Steve. The waiting game never ends.

    Reply
Deep says

Thats What We Like About You Sir You Just Clarify Market Very Simply.
May God Blessed You Sir

Reply
    Justin Bennett says

    Cheers. It’s far simpler than most realize. Never easy, though.

    Reply
Domitilla says

Thank you Justin Bennett, I’m Domitilla, everythings you explain for is class, because I try to learn by myself. Thank you God bless your life and your family.

Reply
    Justin Bennett says

    You’re welcome. Happy to help.

    Reply
Mongeni says

Everytime your posts amaze me.Thanks for the good work

Reply
    Justin Bennett says

    Now I’m feeling the pressure to amaze every time. 😉

    You’re welcome.

    Reply
Adeyemo John oluwafemi says

thanks sir justin. i will like to hear more about your analysis on euro especially euraud and eurusd

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Sera says

Thanx alot

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    Justin Bennett says

    You’re welcome.

    Reply
POLA P says

U KEEP IT SIMPLE MR

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    Justin Bennett says

    That’s the idea. Thanks for commenting.

    Reply
joel says

Highly appreciated Justin

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    Justin Bennett says

    It’s my pleasure, Joel.

    Reply
Agrey W Wihala says

I real appreciate you Mr justun

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    Justin Bennett says

    The feeling is mutual. 🙂

    Reply
Tebogo Molefe says

Thank you Justin

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    Justin Bennett says

    You’re welcome.

    Reply
Jenerali says

what a move that was. Patience pays

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    Justin Bennett says

    Absolutely! The best piece of advice I can give anyone who wants to make money trading Forex is to do less.

    Reply
Jude says

Thanks a lot sir, I learn a new thing from each if your analysis…..

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    Justin Bennett says

    You’re welcome, Jude. Have a great week!

    Reply
Thulani Nkosi says

Man you are too much

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OGBORO preciouslife says

Nice one

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Colin de Ste Croix says

Yes big down trend. Needs a pullback!! 1.71000 also would be a great number to short from if it goes that high?.

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AyubWangera says

How much was it again Justine to be in the members area

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Oluchukwu says

I am really enjoying your analysis. I don’t have the money yet, but once i do, i will pay for the membership.

Thanks a lot, and keep up the good work.

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    Justin Bennett says

    You’re welcome. We look forward to having you as a member.

    Reply
FRANK ADEGBAYEMU says

I am very new in forex trading but I appreciate the huge support and education that you guys are giving.I will appreciate if trade signals can come to my mail to help me grow.

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sazzad says

Is 1.6570 level is strong support ? little bounce possibilities exist in this area?

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    Justin Bennett says

    I’ll let the market answer that question.

    Reply
Jenerali says

justin! could i consider the possibility of a wedge chart formation with the support starting from somewhere at the june 2016 low while resistance be the current ascending channel resistance?

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    Justin Bennett says

    Not sure what you’re referring to.

    Reply
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