Overview:
Recently, EUR/NZD has been moving downwards. As I expected, the price tested the level of 1.6011 in an average volume. In the daily time frame, I found a supply bar and confirmed formation of a strong head-and-shoulders pattern (a broken neckline). Besides, i found a very weak yesterday bar close (bar with close near middle of the range). In the H4 time frame, the price rejected strongly our 200 SMA (1.6180) and created a bearish outside bar from 200 SMA. I placed Fibonacci retracement to find a potential end of the upward correction and got Fibonacci retracement 38.2% at the price of 1.6080 (successfully held) and Fibonacci retracement 61.8% at the price of 1.6120. According to the daily time frame, I found testing of the 200 SMA. I expect further downward movement and retesting of 1.5850 and even a potential breakout to the downside.
Fibonacci Pivot Points:
Resistance levels:
R1: 1.6160
R2: 1.6235
R3: 1.6355
Support levels:
S1: 1.5915
S2: 1.5840
S3: 1.5720
Trading recommendations : Buying EUR/NZD looks very risky at this stage since the price rejected strongly our 200 SMA in the H4 and daily time frames. Watch for potential selling opportunities.