EUR/NZD on the H4 timeframe is seen moving in a down channel. Therefore, look forward to short opportunities when the price rises to test the supply zone.

Hi fellow traders! EUR/NZD seems to wear out again yesterday. This pair was hit by successive slumps over the past week so it managed to form a bearish channel on the H4 timeframe. Therefore, look forward to open short when the price rises to test the supply zone.

eurnzd daily

 

Analysis and Recommendation

Let's take a look at the following EUR/NZD H4 chart below: 

eurnzd h4

Based on the H4 chart above, it has been pointed out that EUR/NZD is currently trying to crawl up to test the supply zone of 1.6980 – 1.7030. Since EUR/NZD is moving in a bearish channel, testing the supply zone can make the pair decline to 1.6880.

Be aware of the EUR/NZD rally if it can penetrate the 1.7030 level and move out of the bearish channel because EUR/NZD will rise to a higher supply zone to restore the situation if it manages to get out of the bearish channel. That way, alternative buying scenarios can be arranged for when there is a runaway.

Here are two trading scenarios that can be prepared:

  • Therefore, set a short position at 1.6980 when the price manages to enter the supply zone and a bearish signal confirms it. Stop loss may be positioned at 1.7030, while the profit target on 1.6880.
  • Alternatively, set a long position at 17030 when a significant breakout signal confirms it. Stop loss may be positioned at 1.6980, while the profit target on 1.7110.

Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!

EUR/NZD key levels: 

  • Resistance: 1.7170, 1.7110, 1.7030, 1.6980
  • Support: 1.6880, 1.6820