EUR/NZD: RANGE BOUND AT RESISTANCE, WHERE TO NEXT???
The Euro is trading at 1.67150 against the New Zealand Dollar during today's London Session.
Starting on the monthly timeframe we can see we had a very bearish candle closure in January breaking our key-level of 1.67000 with a bit of a release in pressure during February pulling the Euro back to our key-level which tells me this remains an important level for the pair. Looking at the weekly timeframe price action is fairly choppy and has been trapped in a 350 PIP range for approximately 6 weeks now.
If we consider 1.64250/1.64500 region as overall support we have potentially created a double bottom printing an inverted hammer with a bullish follow through the past two weeks given the weakness in the New Zealand Dollar. Looking on the daily timeframe we have potentially created an inverse head and shoulders however price seems to be finding resistance at 1.67000 forming an area of consolidation which is illustrated on the 4-hour chart above. I personally do favour further upside on this pair however I will need a break of the consolidation as well a break of our descending trendline and closure above 1.67000 resistance, one could wait for a daily closure for further confirmation. The next levels of resistance for the pair are 1.68500 as a minor level of daily resistance then further up we have 1.70500. What would invalidate this position is a break of the consolidation to the downside which would require further evaluation as to where we head next.
Fundamentally we had European retail sales (MoM) coming out yesterday at 1.3% where consensus at 1.2%, later on this week we have the ECB interest rate decision, Employment change, as well as GDP figures which would increase the volatility in this pair however the risk to reward remains to the upside where we could be watching out for comments from the ECB.