NZDCHF Analysis - Major supports are gone
On the 29th of October we wrote a piece about the NZDCHF. In that analysis, we were bullish and that was a great call. Since our piece was published, the price climbed more than 150 pips higher and made new mid-term highs. Today, we will continue our positive approach towards the NZD but we will change the second currency in the pair. Our hero for the 5th of November is the EURNZD.
The pair is sharply falling down since the 8th of October. From the technical point of view, the decline is caused by the double top formation (yellow rectangle). What is more, the double top pattern, in the same time, is a false breakout formation, above the orange resistance. Combination of those two factors, gave us a strong decline, which allowed the price to break the long-term up trendline (blue). That is a very negative sign and opens us a way towards the 1.655, so the lows from January and June. Most probably it will not happen just like that and we will need a bullish correction in the meantime but chances for the price to get there are very high.
To sum up: Our outlook on this instrument is definitely negative and we see a big chance for a further drop. Entering right here, right now is a bit too risky though, mainly because it seems that the EURNZD can be oversold at the moment. To be honest with you, I would prefer to wait for the bullish correction first.
Author
Tomasz Wisniewski
Axiory Global Ltd.
Tomasz was born in Warsaw, Poland on 25th October, 1985.
