EURNZD Weekly Technical Outlook
Until last week, price action on this pair has been ranging for two weeks. Last week, a bearish candlestick breached below the monthly central pivot. A bullish candlestick which formed five weeks ago has acted as control or master candlestick, and last week price action retested its low but could not significantly breach it. Should the bears follow through this week, they may target the low of the doji-like candlestick formed on the weekly time frame six weeks ago, which is in the 1.66190 area. Also, the support trendline (red colour) formed from the low of February 2017 is likely to be attractive as a target for bears but this is still far away.
On the daily time frame, price action has been operating in an ascending channel (bound by navy coloured lines) for quite a while. Last week, price action breached the channel support line. But the bearish move lacked follow through as the bulls were still influential, given the ‘wicky’ and small candlesticks formed on Thursday and Friday last week. Thus, we may see some consolidation or retracement of price action in the early part of this week. Should bulls wrestle control, price action may pull back into the channel and bulls may target the immediate resistance around the 1.71595 area, which is in confluence with the monthly central pivot. However, should bears manage a follow through, we may see price action move further southward. In which case, the immediate horizontal support, which is around the 1.66920 area, may be an intial target for bears. This is likely to expose the 1.63650 handle.
On the H4 time frame, between September and November 2017, price action was consolidating in an ascending channel (bound by navy coloured lines), which was seen on the daily time frame. This has been followed by a descending channel (bound by magenta coloured lines) since December 2017. We may expect price action to continue its move southward and this is supported by the technicals on the H4 time frame. However, given the fact that price action was consolidating last week Friday, we may see the consolidation to continue for a while, or even see a pullback, in the early part of this week before a bearish continuation materializes.
I may be wrong. Trade safe and prosper.