EURNZD is moving sideways these days, bouncing between support at 1.6550 and resistance at 1.7150. Price just bounced off the top of the range recently and is hovering around the middle. A downside break of this area of interest could set it on track to the bottom.
Price is also finding support at the 200 SMA at the moment and a bounce might take it back up to the range resistance. Also, the 100 SMA is above the 200 SMA so the path of least resistance is to the upside.
Stochastic is indicating oversold conditions and turning higher could allow price to follow suit. RSI is on the move down but is nearing the oversold area also. The moving averages are oscillating which suggests that the range-bound action could carry on.
Last week, data from the euro zone came in mostly in line with expectations, as the preliminary GDP from Germany showed 0.3% growth while the region’s flash GDP reading also came in at 0.3%. However, industrial production slumped 1.1% instead of showing the projected 0.3% increase.
New Zealand quarterly retail sales data is up for release next and strong gains for both headline and core figures could mean bearish momentum for EURNZD. On the other hand, disappointing readings could spur a rally and perhaps even an upside breakout.
A break in either direction of the range could mean around 600 pips in gains or losses, as this is roughly the same height as the rectangle formation. A break below 1.6550 could lead to a drop to 1.5950 while a rally past 1.7150 could lead to a climb until 1.7750.
Market sentiment could also play a role in price action, as risk-off flows tend to favor the euro versus the commodity currencies. OPEC talks could also influence the direction of this pair, as positive updates could mean gains for the Kiwi.
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