Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
I wrote about EURNZD in Sunday’s weekly forecast.
The idea was straightforward. Because last week closed above 1.7120 and then failed to hold it as new support, the euro cross was likely to turn lower this week.
As I often write, a false break to one side of a level or pattern often triggers an extended move in the opposite direction.
However, in the case of EURNZD, sellers still have work to do.
There is a trend line that extends from the year-to-date low that is propping up today’s session so far.
At the moment, that level comes in near 1.7060.
That’s the last line of defense for buyers as far as I can tell.
In other words, a daily close below that 1.7060 area could send EURNZD lower toward the 1.6720 horizontal support level.
But that doesn’t mean there won’t be bumps along the way.
No market moves in a straight line. That’s especially true for a currency cross like EURNZD.
For instance, I would also expect to see some demand in the 1.6930 region.
As for what could trigger a breakout here, we have several upcoming events that will provide an influx of volatility for the New Zealand dollar.
First up is the RBNZ Financial Stability Report at 5 pm EST. That’s followed by a speech from RBNZ Governor Adrian Orr at 7 pm EST.
Then we have the ANZ Business Confidence results at 9 pm EST followed closely by another speech from Adrian Orr at 9:10 pm EST.
As you can tell, the next 24 hours could be quite volatile for the EURNZD.
But as long as 1.7120 holds as resistance on a daily closing basis, I will continue to look for a short opportunity following a break below channel support at 1.7060.
Key support below that comes in at 1.6720 with a minor area at 1.6930.
Alternatively, a daily close back above 1.7120 would delay the short idea.
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