After a successful rally from the first days of October, now, EUR/NZD-bears are hoping they could take a bit of control and drive the pair back down for a little bit of retracement. Given the fact that the euro is quite weak against most of the major currencies right now, we see a possibility for EUR/NZD to continue correcting lower, as it has started forming lower highs from the short-term perspective.
A break below the 1.7760 could support the idea discussed above and could initially open the path towards the 1.7735 support line, a break of which could invite more bears to the table. EUR/NZD could then start aiming for the next potential area of support at 1.7680, marked by the high of the 27th of September. If that support zone won’t be able to withhold the bears, a further move lower could lead towards the 1.7595 level, which was the inside swing high of the 1st of October.
Our indicators, the RSI and the MACD, are also somewhat in support of the above-discussed idea. The RSI has topped near the 80 zone and pulled back down, it currently sits just slightly above 50. The MACD, even though it is still in positive zone, it has also topped, shifted below its trigger line and is now pointing to the downside.
Alternatively, if EUR/NZD decides to push back above the 1.7850 area, this could be a sign that the bears are losing the battle. The bulls could then try and lift the pair to the 1.7930 barrier, which yesterday held the rate strongly from moving higher. If this time that barrier is not going to show any significant strength, the bulls could ease through it quite quickly, where the next target could be the 1.8025 obstacle, marked by the highest point of September 2015.
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