EUR/NZD popped briefly above the noted 1.5800-35 convergence zone from the last update, as well as the 200-day sma near 1.5865/70 (not shown), however it was unable to sustain this move higher as it failed above the 50-week sma (1.5885/90) into the 78.6% retracement around 1.5920. From an Elliot Wave perspective EUR/NZD appears to have completed a double zigzag pattern which suggests wave-2 up (black) is likely complete. Additionally, this reversal was accompanied by a daily RSI failure into the key 60/65 level, which tends to hold as resistance if a pair is in a downtrend. Furthermore, it appears price has once again made a head fake above the daily 144 & 169 EMA’s while the 13-day sma remained below and now EUR/NZD is back once again below the aforementioned EMA’s (signifies a potential market failure/bull trap).
Currently, the Euro cross is hovering just above the key 1.5750/55 level, which sees a convergence of trendline support (drawn from the 11/7 low), 13-day sma (red) as well as the 50-day sma (not shown). Interestingly, daily RSI has already broken below corresponding trendline support. Should price follow suit, it could test the bottom of daily Ichimoku Cloud around 1.5690/95 initially and may be poised for a greater decline towards the 1.5390/95 prior low over the ensuing days/weeks.
Chart Source: Forex Charts by eSignal
