EUR/NZD traded somewhat higher on Tuesday, after rebounding from 1.8185 on Monday. Overall, the pair continues to trade above an upside support line drawn from the low of February 19th, and thus, we would consider the short-term picture to still be positive.
That said, we would like to see a decisive break above 1.8605, before we start examining larger advances. Such a break may encourage the bulls to push for the psychological zone of 1.9000, or even the 1.9080 barrier, which is the peak of March 9th. If they don’t stop there either, then we could see them climbing towards the next psychological zone, at around 1.9500, which was last tested back in March 2011.
Taking a look at our short-term oscillators, we see that the RSI lies above 50 with a positive slope, suggesting that it may be slowly headed towards 70. The MACD stands well within its positive territory, but fractionally below its trigger line. Both indicators detect upside speed but the fact that the MACD lies below its trigger line make us somewhat cautious over a possible setback before the bulls decide to shoot again.
In order to start examining a trend reversal though, we would like to wait for a dip below 1.8185. This would also confirm the break below the pre-mentioned upside line and may initially pave the way towards the 1.7855 zone, marked by the low of March 11th. Another break, below 1.7855, may extend the slide towards the 1.7635 territory, which provided decent support between March 2nd and 6th.
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