EUR/NZD Pushing higher

Last week EUR/NZD was trading lower as New Zealand GDP missed market expectations. The pair bottomed at 1.6840 -1.6810 area where met the bullish trend line, starting from February 2017. So after testing for a while this significant support level finally bulls prevailed and during last sessions are showing strong upward strength. Today the pair broke the 2018 high at 0.7132 and currently is trading at 1.7154.
Technically speaking the short term outlook remains bullish. On the four hour time frame the price is developing well above its bullish moving averages. RSI and stochastic are located within extreme overbought territories and both are showing strong upward momentum.
Given the above EUR/NZD has potential to accelerate further and mark new highs. First resistance is seen at 0.7250 and a break above it will open doors for testing 1.7482. Meanwhile the upcoming session will bring the latest RBNZ monetary policy announcement with expectations to keep rates unchanged at 1.75% especially after the weak GDP numbers from last week, which will additionally support the New Zealand bulls. 

EUR/NZD Vulnerable ahead of GDP

Last week EUR/NZD surged higher and tested the significant resistance zone around 1.7130, with which bulls experience difficulties lately. Since then the pair suffered a huge drop and today was seen hovering around the key support at 1.6840.

Within the next hours the New Zealand Statistics will release the latest growth estimate with expectations of higher figures on GDP for the fourth quarter of 2017, but this optimism might play a low-down trick on the pair. 

On the four hour time frame the price is developing below its flat 100-day and 200-day SMAs, acting as first resistance at 1.6900. The 20-day SMA has eased its bearish slope and is currently located slightly above the current market price. 

RSI is hovering around 45 unable to find clear direction, while stochastic is showing string bearish momentum and is going to cross to below its mid-line.

During the upcoming session it’s very important to see how the pair will behave within the support zone at 1.6840 -1.6810. It’s a very significant area where last week’s lows met the bullish trend line, starting from February 2017. In case of breaking it to below, door are opened for testing 1.6720. On the upside the pair remains capped by the 100-day and 200-day SMAs and if bulls succeed to fight it and the to overcome next resistance at 1.7090, then we might be sure that the uptrend would hold for a while yet.

EUR/NZD Closing outside of the wedge

Since June 27 EUR/NZD has entered into ascending channel, but the pair abandoned it in mid December. Bulls attempted to enter into it again, but failed. Currently the pair is trading at 1.7045, the point of the exit from the channel and the staring base of the wedge formation. 

As clearly seen on the daily chart the top side took shape and the price is about to close outside of it. Another confirmation for the rising bulls' froce is the importance of this level, support turned into resistance. RSI and stochastic are floating within warm positive territories with strong upward momentum. Short term support is provided by the 100-day SMA at 1.6894, around which the price was hovering around last week. To confirm the bullish bias in the long term bulls should conquer at least the 1.7450 handle in order to get back into the uptrend channel. 

EUR/NZD Is Forming Falling Wedge Pattern Ahead Of RBNZ Meeting. But Will We See Trend Reversal?

The Reserve Bank of New Zealand is meeting tonight and will unveil its stance on the monetary policy. It’s widely expected to keep the main interest rate unchanged at 1.75% as in Sempember the Acting Governor shared his opinion that “numerous uncertainties remain, and policy may need to adjust accordingly.” 

In this line the New Zealand Dollar could not be particularly affected, having is mind that during the past two weeks is much stronger comparing to its main rivals.

The technical picture is more interesting for the EUR/NZD than the current fundaments. On the four hour time frame we have a Falling Wedge pattern. The Fibonnaci retracement of late October bullish run provides strong support at 61.8% (1.6660) and the price for now is stready above it. Meanwhile on the same chart we have bearish 20-day SMA and the 100-day and 200-day SMAs are keeping upward momentum. Indicators are located sightly below their mid-lines with RSI turning to north and stochastic is losing directional strength. That said in the showrt term there is a risk of crossing to below the above mentioned level of 61.8% Fibonacci retracement and this will lead to a continuation to the downside. But this will be against the Falling Wedge pattern. Currently the price is stuck between the 50% and 61.8% levels of same Fibo and in case of conquering the resistance at 50% (1.6770), doors are opened for testingt the 1.6800 handle.