EURNZD Weekly Technical Outlook
The pair has been disposed northward for a while but momentum has waned. On the weekly time frame, last week the pair moved from an area of consolidation where price action operated in the previous two weeks. Buyers took control of price action and pushed the pair into the immediate resistance zone where buyers’ further attempt to push price beyond the zone was resisted by sellers.
On the daily time frame, price action rejected an outer ascending trendline (in chocolate colour) to respect an inner ascending trendline (in navy colour). However, the order flow context, with an increae in the relative size of bearish candles, indicate that the buyers are not fully in control. The pullback of price action following the French presidential elections showed a strong bearish influence, and since then the bullish candles have not been particularly dominant in size. There may be a period of consolodiation in the offing, perhaps before another retracement; particularly as price action has reached a zone that has served as a support zone on a number of times in the past and last visited in June 2016. Will the zone experience a role flip, becoming resistance on this visit? If a retracement takes place and price bounces off the ascending trendline (in navy colour), the upward move may be a trigger for further bullish push perhaps with the next resistance zone around the 1.65068 area as target. However, should price action break below the trendline, this may be a beginning of a southward turnaround, and with an initial target being the next support zone around the 1.59197 area. This may expose the monthly pivot around 1.56272.
Recent price action on the H4 time frame shows that buyers and sellers are in battle for control. The momentum for a northward move is waning, indicated by the weak slopes of the MAs I use and the fact that the most recent sessions saw the bears in control. Should this lead to a topping formation, we may expect price action to retest the ascending trendline (in navy colour) around the 1.59470 area, which adjoins the immediate support zone.
Alternative technical biases:
Long-term: Northward, particularly should price action bounce off the H4 trendline (in navy colour) upwards or break above the 1.63047 area; southward, should price action break below the trendline around 1.59470.
Short-term: consolidation around current price location or retracement towards 1.59470.
I may be wrong. Trade safe and prosper.