EUR/NZD is currently observed to be undergoing a corrective bearish move, testing the demand zone. Therefore, look for buying opportunities that exist within the demand zone.
Hi fellow traders! EUR/NZD appeared to be trading steadily in a bullish trend on Friday (March 10th). Despite a bullish note, the pair is currently seen undergoing a correction. EUR/NZD is currently wearing out toward the nearest demand zone, around 1.7295. Therefore, wait and look for buying opportunities when the price is in that demand zone.
Analysis and Recommendation
Let's take a look at the following EUR/NZD H1 chart below:
From the H1 chart above, it has been pointed out that EUR/NZD is currently correcting from its bullish trend. The pair trades lower to test the demand zone around 1.7295 - 1.7240. As the bullish bias is still dominant, look for buying opportunities when the price starts to move up from the demand zone.
However, be cautious if the pair weakens and breaks below the 1.7240 level. If there is a significant breakout at that level, EUR/NZD is expected to continue to correct towards a deeper demand zone around 1.7165 - 1.7115.
Here are two trading scenarios that can be prepared:
- Therefore, set a long position at 1.7295 when the price manages to enter the demand zone and a bullish signal confirms it. Stop loss may be positioned at 1.7240, while the profit target is at 1.7368.
- Alternatively, set a short position at 1.7240 when a significant breakout signal confirms it. Stop loss may be positioned at 1.7295, while the profit target on 1.7165.
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: 1.7424, 1.7368
- Support: 1.7295, 1.7240, 1.7165, 1.7115