EURNZD Mid Term Thoughts

Trading Discussion
1

Here are my thoughts on EURNZD.

This pair has been a tough one to trade lately, but I believe that we are due some more upside before we see a big decline.

We can see that price has broken out of a downtrend and it is making it’s way upwards. I believe that price will come back to test the TL & Demand area (1.7875-1.78391). Should price bounce and reject this area nicely, I would expect it to hit 1.8282-1.83 supply area. This a key level to keep in mind as we have previously rejected this area twice already.

Should price break through here - the last supply zone I have marked up is 1.84-1.8440. This is where I believe that price will collapse. Should we see some good price action around this region, I will be shorting and holding this pair for a long time!

Let me know what you think below - cheers.

EURNZD
EURNZD1467×836 54.7 KB

1 Like
2

your analysis is mirroring my thoughts right now too, i too am thinking a sell here

3

Yep, we all agree, it’s heading down…

4

Looks to be hitting the middle support level as you suspected it would

5

It looks like it currently back up on the way to your supply zone. I will keep a close eye on it and see what happens when we reach that area.

6

EURNZD looks like it’s on its way up.

Try not to stay fixated on a single time interval on a chart like the 4H.

On the daily chart, the price bounced off its 50 MA. The 20 MA is now the only (dynamic) resistance holding it back.

If price can breakout and close above 1.8300, a return to 1.9000 looks possible.

On the 4H, it’s zig-zagged between 1.79 and 1.83, trading sideways in a range.

Aside from the 1.83 handle, the resistance area here is the 200 SMA.

I’d look for the price to close above both 1.83 and the 200 SMA, then go long.

For me, as long as the price remains above 1.7840 (last week’s low) and the 50 SMA (on the daily), I stay bullish because the long-term trend is still up.

If you put up Fib retracements on the daily or weekly chart, you’ll see a nice retracement to the 0.681 level.

The quickest way to see this is on MarketMilk,

You’ll notice how EURZND is still trading above ALL its moving averages (on the 1D time interval) except for its 20 SMA.

Long-term trend strength is bullish. Short-term trend strength is still bearish but is weakening (the dot is headed toward the right).

From a fundamental view, I think EU is close to imploding, which would hurt the euro.

Obviously, this goes against my technical view but that said, I don’t like to trade against the trend and prefer to follow the price action.

7

Forgot to mention your observation about this supply area. As you noted, the area has been rejected twice already but the more times it’s hit, the weaker the area gets.

Why? Every time the price reaches a resistance level, the balance between the buyers and the sellers’ changes.

Whenever the price reaches resistance, more sellers will enter the market and enter their sell orders. If the price reaches the same resistance level again, fewer sellers will wait there.

Rejections from a resistance become increasingly weaker as the market continues to absorb more sellers until buying demand finally overcomes selling pressure.

8

Here is an update on EURNZD.

If you took this trade, you would have caught 413 pips from the entry point I mentioned. This trade was literally 1-2 pips drawdown.

In my original analysis, I mentioned that the 1.8282-1.83 supply area would have been a tough one and to look out for it. Personally, I waited for multiple rejections before exiting this trade.

You can see a clear rejection before coming back down to the original demand zone I marked. It is likely that we will see price to move back up, as we have yet again seen multiple rejections, but I will be staying away from this, unless we see a break lower to the demand zone at the bottom. I don’t like to enter trades where a supply/demand zone has been tested more than twice.

Let me know if you took this trade and profited from it!

EURNZD
EURNZD1500×839 54.9 KB

9

This was a good trade. :+1:

10

Lovely Pippage !!! :smiley: :smiley: :smiley: