EUR/NZD traded higher after hitting support near the 1.6570 zone, which is the lower end of the sideways range the pair has been trading within since December 1st. That said, the recovery was stopped near the upper bound of the range, at around 1.6773, and thus, we will still hold a neutral stance with regards to the short-term outlook.
In order to start examining whether the picture has turned positive again, we would like to see a clear break above 1.6773. This will confirm a forthcoming higher high and may initially target the 1.6835 barrier, which is the high of October 1st. Another break, above that level, could extend the advance towards the 1.6910 barrier, which is marked by the peak of September 29th, or the high of August 27th, at 1.6950. If the bulls are not willing to stop there either, then we may see them climbing towards the high of August 24th, at 1.7063.
Shifting attention to our short-term oscillators, we see that the RSI emerged above 50, but has recently slowed down, while the MACD lies slightly above both its zero and trigger lines. Both indicators detect upside speed, but the slowdown of the RSI adds credence to our choice of waiting for a break above 1.6773 before getting confident on larger advances.
On the downside, a break below 1.6570 could wake up the bears, who could initially aim for the 1.6510 or 1.6480 barriers, marked by the lows of December 1st and November 29th. If they don’t stop there, we could see them diving towards the 1.6395 barrier, marked by the inside swing high of November 25th, the break of which could extend the fall towards the low of the same day, at 1.6300.
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