FX.co ★ UFCworriers | EUR/NZD

DAILY CHART ANALYSIS OF EURNZD The daily chart of EURNZD visually represents a relatively clear withdrawal from a bullish pattern to a downward correction phase. The earlier movement of price executed a strong upward pattern with higher highs and higher lows, resulting in a major swing high near 2.0695. This point now serves as a major resistance and the source of the current decline. After this highest point, lower highs and lower lows were continuously made in the market, suggesting the formation of a downwards structure. Besides, the falling trendline traced from the 2.0695 high has always been strongly hitting the price and thereby indicating that the selling pressure is still vigorous on the time scale of one day. The first fall from 2.0695 strengthened rapidly and dragged the price down to the 1.9540-1.9600 range, which is now a very important support level. This zone can be identified by the past price reactions of the market, and with the help of a consolidation band, where buyers have appeared as many times as the spot has been hit. The makeup of a few small candles with a body of a little size and the presence of the wicks shows that there is demand in the vicinity of 1.9550. On the contrary, the price has been unable to recover significantly even though the support is present, which points out the fact that the overall downward con version, line on the timescale of one day, is probably still here to stay. The Fibonacci retracement analysis applied to the substantial upward movement from roughly 1.9540 (0%) to 2.0695 (100%) allows us to map retracement levels that influence current market interaction. The 23.6% retracement level is near 1.9800 and has recently turned out to be immediate resistance. Several tries to break above this level have been unsuccessful, signaling its role as the primary obstacle to any bullish rebound. Beyond this point, the 38.2% retracement level is set close to 1.9930, where it intersects not only with the descending trendline but also the former consolidation highs. The merging of these factors forms a robust resistance cluster that is very likely to curtail short-term upward moves. Above that, the 50.0% retracement level can be found around 2.0055. This point had previously served as a pivotal element of the structural framework during the early phases of the decline. A breakout above 2.0055 on a lasting basis would mean that the corrective stage is losing its intensity, and this could really set the stage for a broader recovery move up to the 61.8% retracement level near 2.0185. The 61.8% point is a key Fibonacci level that, in fact, there is also the descending moving average and the previous support that has now turned into resistance, thus representing a very tough hurdle for any change of direction in the trend. Therefore, with the price still under 2.0185, technically, the overall bearish correction is still in place. Looking at the trend structure, the market has shifted into a downward channel with a descending trendline connecting the highs from 2.0695, along with the series of lower highs made near 2.0300 and 2.0050. The failure to move above these intermediate highs indicates that the bearish momentum is still in place. The markets inability to decisively get back above 1.9800 during the recent rallies suggests that the bulls are not strong enough. On the downside, the 1.9540, 1.9600 level is still the most important support zone. This area has served as a support and demand base and has kept the market from falling further during the recent sessions. A break and daily close below 1.9540 would be a signal that the downtrend is continuing and will likely lead to the next support levels at around 1.9450 and 1.9350. However, a fall to the lower levels could go as far as the structural support near 1.9200, which is the bottom of the initial upward trend. On the other hand, if buyers really succeed in pushing the price over the 1.9800 resistance level, the next target on the upside would probably be the 1.9930 area corresponding to the 38.2% Fibonacci retracement. A climb above this level would be the first meaningful shift in short-term momentum and might trigger a rally towards 2.0055. Still, unless these resistance levels are taken back, price increases are probably only going to be correction rallies inside the bigger bearish structure. In general, the daily trend line for EURNZD at the moment represents a correction phase after a major peak of 2.0695. The market is gathering strength near the important support level of 1.9540, 1.9600, while it is also facing several resistance levels at 1.9800, 1.9930, and 2.0055. The downward sloping trendline is still in control of the price movement, and the pattern of lower highs is a clear indication that sellers are still dominating the bigger structure. Only a strong break above the highest Fibonacci resistance levels would indicate a significant change in trend direction.