Loading...
by Charalambos Pissouros

EUR/NZD Completes a Short-term Double Top

EUR/NZD traded lower on Friday, breaking below the support (turned into resistance) level of 1.6487 and signaling the completion of a short-term “double top” formation. The rate continued drifting south and today, during the early Asian morning, it hit support near 1.6435. Then, it rebounded somewhat. In our view, the completion of the double top, combined with the fact that the rate is still trading below the downside resistance line drawn from the high of January 22nd, suggests that the bears may be willing to continue pushing lower for a while more.

That said, before we get confident on some further declines, we would like to see a clear dip below 1.6405, a support defined by the inside swing high of March 26th. That zone was also proved to be a strong support back in mid-February, as well as on March 12th. Such a break may open the path towards the 1.6345 barrier, the break of which could set the stage for a test near the lows of March 26th and 27th, at around 1.6290.

The RSI turned down from slightly below its 50 line, while the MACD lies below both its zero and trigger lines, pointing south as well. These indicators detect downside momentum and support the notion for this exchange rate to continue drifting lower in the short run.

On the upside, a break back above 1.6487 may signal that the bears have decided to take a small break and may allow a recovery towards 1.6540. Another break, above 1.6540, could aim for the 1.6575 hurdle or the aforementioned downside line drawn from the high of January 22nd. Having said all that though, in order to start assessing whether the bulls have gained full control, we would like to see the rate closing above that downside line, as well as above 1.6575.

EUR/NZD 4-hour chart technical analysis

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.

76% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.

Copyright 2019 JFD Group Ltd.

WEEKLY FINANCIAL NEWSLETTER
RIGHT INTO YOUR MAILBOX!
SUBSCRIBE TO JFD'S STRATEGIC REPORT