EURNZD edges closer towards 1.360 target

The original analysis in Dec and Jan has played out nicely as the carry trade on the two divergent economies continued to push EURNZD down towards my 1.360 target

Trading around 1.60 at the time of the original analysis we find ourselves 'only' 700 pips from the 1.360 target. When you consider this pair can easily move in excess of 300 pips in a single session then the 700 pip leg should not cause too much of a concern.

The current daily range is within the 100-150 pip region and has found resistance below 1.4560 resistance, suggesting the end of a correction may be nearing. We also find ourselves around the 20 day eMA and below the Monthly Pivot. If we see any bounces within yesterday's range (a Spinning Top Doji) then I will consider fading into the 1.4560 resistance which could achieve a decent 3:1 reward / risk ratio, assuming we move down towards the March lows.

There is no noteworthy news from NZ this week so any significant movements are likely to come from the Eurozone, in particular anything to do with GRExit.

However we may also see a reaction around FOMC, with further Dovish signals from the FED likely to help support Euro crosses and see an upside reaction on EURNZD. Under this circumstance I will still be seeking shorting opportunities in line with the dominant bearish trend, just at higher prices.

As long as we remain below 1.4560 resistance then I favour a run down to 1.4130 lows and eventually beyond.

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