Trading opportunities on currency pair: in the EUR/NZD cross a correction has strengthened after the Reserve Bank of New Zealand dropped its base rate by 0.25% to 3.25%. If the EUR/NZD rate strengthens above 1.6150, prepare for a global correction on the downward trend from 2.5796 to 1.3881. First target: 1.6693 (23.6%) and 1.8432 (38.2%). The Greek situation shouldn’t have any effect on this.
There are significantly less working currency pairs than shares on the New York stock exchange so every week I end up coming back to the same pairs. Today I stopped on the EUR/NZD cross.
From Wednesday to Thursday the New Zealand dollar lost its position after the Reserve Bank of New Zealand dropped its base rate by 0.25% to 3.25%.
The EUR/NZD recovered practically without a rebound from a 1.3881 minimum to 1.6154 ( 2273 points). The RBNZ’s governor, Graeme Wheeler, stated that a further relaxation of monetary policy is possible and viable, but depends on the state of the economic data that comes out. A fall in the price of dairy produce and a rise in the price of fuel over the last two months forced the RBNZ’s hand to drop their rate.
It’s worth giving attention to the fact that the euro has strengthened, despite the uncertainty over Greece. The IMF has put an end to its talks with the country. Germany is considering the outcome of a Grexit. You can imagine how high the EUR/NZD will jump when the Greek situation is resolved.
Now look, the EUR/NZD has broken the trend line (H1,7276-H1,6447) and has neared the strong resistance level. It’s not worth buying euro for New Zealand dollars at the moment since after an eight-week growth there’s the possibility of a recoil. Before breaking the resistance, we would want it to drop to 1.5250 (50% from a growth of 1.3881 to 1.6154). Then a global correction on the downward trend could start from 2.5796 to 1.8432 (38.2%). The idea is a long-term one. The stops can be set after a recoil or a strengthening of the price above 1.6149.
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