Yesterday closed as a bearish pin bar reversal on the daily for the EURNZD cross-pair. While this currency pair has been moving sideways which is something typical of the sluggish summer markets, yesterday’s pin bar does mark something pretty significant in the scheme of things. As you will see on the chart, it represents the point where a lower high was made on the daily timeframe.
EURNZD: TREND IN CONTEXT ON DAILY
EURNZD: CLOSE-UP OF POTENTIAL DOUBLE TOP ACCELERATION POINT
This could potentially be the acceleration point for the continuation of the prevailing downtrend for EURNZD to continue and for the long-anticipated “phase 1” extension leg to continue.
This pair has been trending for the past year, making lower highs and lower lows and price has retraced to an only support level and is testing it as resistance.
The old adage goes, the trend is your friend until the end when it bends. As EURNZD is in a well-established downtrend, it would make abundant sense to trade with it.
Many traders will use the break of yesterday’s low (Wednesday) as their entry point (below the low minus spread) with their stoploss above yesterday’s high (plus spread) for what could be a protracted long-term sell trade with the downtrend on the daily. After all, if yesterday’s low does break it will dramatically increase the likelihood of the formation of a double top formation on the daily.
If price does break the 1.5746 zone which corresponds with the neckline of the double top formation then it will be confirmed – adding to the probability of a potential move down to the swing low on the daily at 1.5462
EURNZD: TREND IN CONTEXT ON DAILY
EURNZD: CLOSE-UP OF POTENTIAL DOUBLE TOP ACCELERATION POINT
This could potentially be the acceleration point for the continuation of the prevailing downtrend for EURNZD to continue and for the long-anticipated “phase 1” extension leg to continue.
This pair has been trending for the past year, making lower highs and lower lows and price has retraced to an only support level and is testing it as resistance.
The old adage goes, the trend is your friend until the end when it bends. As EURNZD is in a well-established downtrend, it would make abundant sense to trade with it.
Many traders will use the break of yesterday’s low (Wednesday) as their entry point (below the low minus spread) with their stoploss above yesterday’s high (plus spread) for what could be a protracted long-term sell trade with the downtrend on the daily. After all, if yesterday’s low does break it will dramatically increase the likelihood of the formation of a double top formation on the daily.
If price does break the 1.5746 zone which corresponds with the neckline of the double top formation then it will be confirmed – adding to the probability of a potential move down to the swing low on the daily at 1.5462
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