Technical Analysis – EURNZD hold above support region after false break; is capped by 50-SMA


Anthony Charalambous, XM Investment Research Desk

EURNZD is being restricted by the 50-period simple moving average (SMA), after a false break below the structure support on November 4 reversed the price back inside it.

The short-term oscillators suggest that the directional momentum has dried up. The MACD, in the negative zone, has moved above its red trigger line and near to zero, while the RSI is hovering around its neutral mark. The mostly horizontal SMAs are limiting advances while the support section holds, keeping the price in a neutral mode. Moreover, they emit undecided signals, even though the 100-period SMA has just slipped below the 200-period one.

To the downside, if sellers manage to pierce through the support structure of 1.7358 to 1.7300 – holding since September – the price may plummet to the 1.7235 inside swing high from September 11. Moving lower, the 1.7200 handle could apply some upside pressure ahead of the support of 1.7172, coming from September 12.

If buyers persist, they may initially face the 50-period SMA at 1.7400 ahead of the coupled 100- and 200-period SMAs at 1.7430. Surpassing this, the high of 1.7465 could interrupt the test of the swing high of 1.7515 and once overcome, the price could rally to test the previous peaks of 1.7614 and 1.7698 from September 20 and October 16 respectively.

Summarizing, the short-term bias looks neutral. Yet, a close below 1.7300 or above 1.7515 would reveal the directional bias.