EUR/NZD continues to trade within a falling wedge formation, which started around the 3rd of July. Currently, we can see that the pair is trying to climb higher by breaking through its key area of resistance at 1.7190. This move has opened the path towards the upper bound of the falling wedge formation, which could get tested if the EUR/NZD continues with the same pace.
For now, as long as the upper side of the aforementioned wedge remains intact, overall, we will stick to the downside. Certainly, before EUR/NZD could move lower again, it could test the upper side of the formation and then drop back down towards the previously mentioned 1.7190 zone. If that zone is not able to withhold the rate from dropping lower, then such a break could open the way towards the 1.7130 level, or even the 1.7115 hurdle, marked by the yesterday’s low.
On the upside, if the upper side of the falling wedge gets broken and EUR/NZD closes above it, this could be a turning point for the pair as further acceleration in the rate may be possible. The next potential area of resistance could be seen around 1.7305, or slightly higher at 1.7327, marked by the peak of the 16th of July. If this area is not able to stop EUR/NZD from moving higher, the move could lead to a test of the 1.7375 level, which acted as strong resistance on the 3rd of July.
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