This potentially bearish formation is well timed – after all, September is historically a bullish month for the Kiwi.
But what is so significant about last night’s bearish pin bar reversal?
Two reasons,
As you will see on the chart, it represents the point where the FOURTH LOWER HIGH was made on the daily timeframe. This signals a bias towards the downside. Whenever the bulls come to move price up, they get superseded by bears
Furthermore, it directly tested the 1.5831 horizontal level which correlates neatly with the previous swing low. The level, which once tested for support between March and May earlier this year, is now behaving as resistance – a key trait of a down-trending market.
EURNZD: CLOSE-UP OF POTENTIAL TRIPLE 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 triple top formation on the daily.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.