Is EURNZD ready for a continuation south? The evidence seems to stack up and we have a confluence of reasons supporting this. Of course markets could do anything – at any time...but as technical traders, we are assessing the following probabilities to see if we can play them in our favour.
On the weekly, we are half way down a long-term range. As for the daily, the horizontal level at 1.6200 marks a decent ceiling of resistance (one support), obstructing further Euro strength against the New Zealand Dollar. We have a price-action-based signal to sell in the form of a bearish pin bar reversal and “hidden” RSI continuation divergence. Furthermore, the level where price action is rejecting overlaps with the 0.382.
Many traders, risking 1-2% will simply place an order to sell (in anticipation of the continuation down) below the low of Thursday’s bearish pin bar reversal (plus spread and an additional pip) with a stoploss above the high (plus spread plus an additional pip). They will have a first target at the previous swing low (1.5783) at which point they will start to scale out of the position.
On the weekly, we are half way down a long-term range. As for the daily, the horizontal level at 1.6200 marks a decent ceiling of resistance (one support), obstructing further Euro strength against the New Zealand Dollar. We have a price-action-based signal to sell in the form of a bearish pin bar reversal and “hidden” RSI continuation divergence. Furthermore, the level where price action is rejecting overlaps with the 0.382.
Many traders, risking 1-2% will simply place an order to sell (in anticipation of the continuation down) below the low of Thursday’s bearish pin bar reversal (plus spread and an additional pip) with a stoploss above the high (plus spread plus an additional pip). They will have a first target at the previous swing low (1.5783) at which point they will start to scale out of the position.
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