NZDCHF Analysis - Major supports are gone
|On the 29th of October we wrote a piece about the NZDCHF. In that analysis, we were bullish and that was a great call. Since our piece was published, the price climbed more than 150 pips higher and made new mid-term highs. Today, we will continue our positive approach towards the NZD but we will change the second currency in the pair. Our hero for the 5th of November is the EURNZD.
The pair is sharply falling down since the 8th of October. From the technical point of view, the decline is caused by the double top formation (yellow rectangle). What is more, the double top pattern, in the same time, is a false breakout formation, above the orange resistance. Combination of those two factors, gave us a strong decline, which allowed the price to break the long-term up trendline (blue). That is a very negative sign and opens us a way towards the 1.655, so the lows from January and June. Most probably it will not happen just like that and we will need a bullish correction in the meantime but chances for the price to get there are very high.
To sum up: Our outlook on this instrument is definitely negative and we see a big chance for a further drop. Entering right here, right now is a bit too risky though, mainly because it seems that the EURNZD can be oversold at the moment. To be honest with you, I would prefer to wait for the bullish correction first.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.