We can help you develop your capabilities until you achieve your dream

Crypto News

Chart Art: EUR/NZD Testing Head and Shoulders Neckline

Is EUR/NZD in for a major trend reversal soon?

I’m seeing a head and shoulders pattern on the 4-hour chart, with price currently testing the neckline support.

Better not miss a potential breakdown if it happens!

EUR/NZD 4-hour Forex Chart by TradingView

EUR/NZD 4-hour Forex Chart by TradingView

Dovish ECB rhetoric has been dragging the shared currency lower against most of its counterparts over the past few weeks, bringing EUR/NZD down to test its head and shoulders neckline support.

However, risk aversion stemming from the Russia-Ukraine conflict has also kept the higher-yielding Kiwi’s gains in check.

Can the upcoming eurozone PMI releases turn the spotlight back to economic catalysts?


Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

Expectations are for slight improvements in the region’s manufacturing and services sector, but downbeat results could highlight the possibility of another ECB rate cut next month.

If that’s the case, look out for a break below the neckline support at S1 (1.7860) and a possible selloff that’s the same height as the chart pattern, which spans roughly 300 pips.

If support keeps holding, on the other hand, EUR/NZD could set its sights back on near-term resistance zones, including the area of interest at R1 (1.8050) then R2 (1.8130).

Note that the 100 SMA is above the 200 SMA for now to reflect bullish pressure but that the gap between the indicators is narrowing to hint at a potential bearish crossover.

As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!


Source link

اترك تعليقاً

لن يتم نشر عنوان بريدك الإلكتروني. الحقول الإلزامية مشار إليها بـ *

زر الذهاب إلى الأعلى

Please turn off the ad blocker, as ads are the only source of our continuity

برجاء دعمنا عن طريق تعطيل إضافة Adblock