EUR/NZD traded higher yesterday, after it hit support at 1.6455, near the upside support line drawn from the low of Apr. 5. However, the advance remained limited near the 1.6620 level, and then, the pair retreated somewhat.
Overall though, EUR/NZD remains above an upside support line drawn from the low of Apr. 5, and thus, we would still see chances for the bulls to take charge again at some point soon.
A clear break above 1.6680 could confirm a trend continuation and may initially pave the way towards the peak of May 12, at 1.6845. If that zone doesn’t hold, then its break will confirm a forthcoming higher high and could aim for the high of Feb. 21, at 1.6935.
Another break, above 1.6935, could carry extensions towards the 1.7050 zone, which is marked as a resistance by the inside swing lows of Feb. 14 and 15.
Taking a look at our short-term oscillators, we see that the RSI lies below 50 and points down, while the MACD, although it now lies above its trigger line, it remains within the negative zone.
Both indicators still detect negative momentum, and that’s another reason why we prefer to wait for a break above 1.6680 before we get confident on another round of strong buying.
On the downside, we would like to see a clear dip below 1.6395 before we start examining a bearish reversal. The rate will already be below the upside support line taken from the low of Apr. 5, and we may see initial declines towards the low of May 4, at 1.6183.
Another break, below 1.6183, could aim for the 1.6090 zone, which provided support on Apr. 26 and 27. Now, if the bears are not willing to give up there either, then we may see them diving all the way down to the low of Apr. 20, at 1.5925.
