Hello traders! As per the 8-hour chart, there is a clear downtrend formed on the EUR/NZD, which has been going on for over 3 months now. While this seems to be quite a long period of time, considering that the downtrend is major, there still more room for the price decline.
Looking at the medium-term price action, there was a consolidation phase throughout April 30 – June 2, where price found the support at 1.7650 and the resistance at 1.8250 areas. On June 2, EUR/NZD broke below the support and tested 1.7190 low. The correction up followed and pair went up to 1.7653 resistance. As can be seen, the resistance area has been rejected, along with the downtrend trendline and the 50 Exponential Moving Average.
This goes to show that the downtrend is still valid and perhaps can accelerate any time. As long the daily closing price will remain below the 1.7653 resistance level, EUR/NZD will continue trending down. The nearest support is seen at 1.6996, which is 427.2% Fibonacci retracement level applied to the corrective wave up after breaking the 50 EMA. It corresponds to the distance between the previous support and resistance and current resistance and the potential support at 1.6993.
But it is also possible that the price will drop even further, to test 527.2% Fibs at 1.6610. This level also corresponds to the 227.2% Fibs applied to the most recent correctional move up.
All-in-all, the trend remains extremely bearish considering the rejection of multiple resistance indicators. The downtrend might start at any time, with the potential 800 pip drop in the coming weeks.
Bias: Strongly bearish while below 1.7653
Potential Resistance Zone: 1.7400 – 1.7500
Potential Targets: 1.6993, 1.6610
Have a profitable trading!