Technical Analysis – EURNZD hits levels not seen in 9-years before dropping back down

Anthony Charalambous, XM Investment Research Desk

EURNZD’s fierce move yesterday stretched towards nearly a 9-year high of 1.8980 before sellers pulled the pair south to around 1.8016, which is a high from back in September of 2015 (previous resistance-now-support). The positive picture still looks intact with the upward sloping simple moving averages (SMAs) and a nearing bullish cross of the 100 and 200-day simple moving averages (SMAs) by the 50-day one.

Additionally, the MACD is deep in the positive region and above its red trigger line, while the RSI remains in the overbought territory, despite slightly weakening.

If buyers resurface, immediate resistance could come from the 1.8144 level, which is the 38.2% Fibonacci retracement of the up move from 1.6784 to 1.8980 ahead of the upper Bollinger band at 1.8295. Pushing north, the 23.6% Fibo of 1.8464 could deter the price testing the 1.8623 high from August of 2015 and encountering the 1.8882 obstacle from May of 2011.

To the downside, the 1.8016 support could impede the price from retracing towards the 50.0% Fibo of 1.7883. Diving below the 50.0% Fibo and the spike low, the 61.8% Fibo of 1.7623 could be next to halt further declines. If sellers steer even lower, the inside swing high of 1.7435 and the mid-Bollinger band beneath at 1.7400 could be next to draw focus.

Overall, the short-term bias remains bullish above the 1.7623 mark. However, a shift below could see a neutral picture returning.