Hello traders! The EUR/NZD had corrected down by 370 pips after forming the top at 1.8263 on May 15. Price seems to have bottomed out at 1.7889 low, where previous resistance was formed back on May 13.
We can see that currently, the RSI oscillator formed a bullish divergence after which price broke above the downtrend trendline. At the same time, EUR/NZD remains above the 200 Simple Moving Average. There were few attempts to break below, although SMA remained respected by the market.
This might suggest that EUR/NZD has reached the bottom of this corrective move down and it is time for yet another upswing. In regards to the upside potential, there are two resistance levels corresponding to the Fibonacci indicator. First is the 50% Retracement level of the Fibs applied to the last wave up where price has produced 1.8263 top. This is 1.8120 resistance, which also corresponds to the 67.8% Fibs applied to the current corrective wave down. The second target could be near 1.8200 psychological resistance, which is very close to 23.6% Fibs at 1.8192.
Clearly the support area is now seen at 1.7900 area, and in order for the EUR/NZD to move higher, the price must remain above 1.7885 level. But if there will be 1h and 4h close below this price, bullish outlook will be invalidated and EUR/NZD should be expected to move down.
Bias: Strongly bullish while above 1.7885
Potential Support Zone: 1.7900 – 1.7930
Potential Targets: 1.8120, 1.8200
Have a profitable trading!