EURNZD has been trading inside a rising channel on its 4-hour time frame and the pair looks ready to make a test of resistance. Price could climb up to the top of the range around the 1.6850 minor psychological level after recently bouncing off support at the 100 SMA.
The short-term moving average is above the longer-term 200 SMA, confirming that the uptrend is likely to carry on. In addition, stochastic is pointing up, indicating that euro bulls are in control of price action. RSI, on the other hand, is pointing down, suggesting that a pullback to channel support around the 1.6600 major psychological mark might take place.
If selling pressure strengthens, a downside break from the channel support might be seen. This could be an early signal for reversal for EURNZD.
EURNZD Fundamental Factors
Concerns about Greece’s third bailout are currently weighing on the euro, as the IMF declined to participate in doling out the next set of funds. The institution wants to see some form of debt relief for the country but the creditors remain opposed to this idea.
Meanwhile, event risks for the Kiwi are lined up in the next Asian trading session. The global dairy trade auction is set later on and another decline in dairy prices could mean more losses for the Kiwi. Afterwards, the quarterly jobs report for New Zealand is due and the consensus is a 0.5% increase in hiring, a slower pace of increase compared to the previous 0.7% gain. This might push the country’s jobless rate up from 5.8% to 5.9%.
Weaker than expected data from New Zealand could increase calls for another RBNZ interest rate cut, which would mean more losses for the Kiwi. Commodity price declines, particularly for gold and oil, could also weigh on the currency and lead to a pop higher for EURNZD.
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