In our analysis we do not always focus on major pairs on the market. You do have much bigger choice and do not have to stick only to those popular instruments, that is why we always try to present the best trading setups, using the technical and fundamental analysis, not the popularity contest. That is why, our today's pick will be the EURNZD, where in the mid and long-term, there is a strong bullish sentiment but in the short-term we do have a chance for a small bearish correction.
Positive sentiment started here with the Inverse Head and Shoulder formation created from November till April. During the formation of the right shoulder, the price managed to break the long-term down trendline (pink) and prepared in this way, managed to break the neckline (blue). That, in theory, triggered the buy signal on this instrument. After that, the price climber 600 pips higher. The upswing stopped on the horizontal resistance created by the lows from March and April 2016. This is a good place for a bearish correction especially that the price created a shooting star on the daily chart, which promotes the short-term reversal.
To sum up. In the next few weeks or maybe even months, the price should aim higher but the closest time should be filled with a small correction, where some of the present bulls will take profits from the latest strong upswing.
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