Even though EUR/NZD is currently in a corrective mode after the announcement of the rate hike increase by the RBNZ, the daily bias is still bullish.
Hi fellow traders! EUR/NZD is currently being corrected from its bullish track. The increase in interest rates announced by the central bank of New Zealand (RBNZ) yesterday made the pair decline from its highest level in the last two months. Even though the pair is in corrective mode, the EUR/NZD momentum for the medium to long term is still bullish.
Analysis and Recommendation
Let's take a look at the following EUR/NZD H4 chart below:
Based on the H4 chart above, it has been pointed out that EUR/NZD is being corrected from its bullish rally. Even though it is being corrected, the EUR/NZD bullish trend is expected to continue. The current corrective movement is expected towards the demand zone around 1.6904 – 1.6820. That way, look forward to buying on dips when prices are moving around the demand zone.
Be aware if the corrective movement continues to penetrate the 1.6820 level since EUR/NZD is expected to continue its corrective phase towards a deeper demand zone if there is a confirmed breakout.
Here are two trading scenarios that can be prepared:
- Therefore, set a long position at 1.6904 when the price manages to enter the demand zone and a bullish signal confirms it. Stop loss may be positioned at 1.6820, while the profit target is at 1.7080.
- Alternatively, set a short position at 1.6820 when a significant breakout signal confirms it. Stop loss may be positioned at 1.6904, while the profit target on 1.6688.
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: 1.7080, 1.7015
- Support: 1.6904, 1.6820, 1.6688, 1.6600 (psychological levels)