Markets On Tenterhooks Ahead Of Draghi’s Finale - EUR/CHF, EUR/AUD, EUR/NZD

EUR/NZD almost looks like EUR/AUD did a few weeks back, only its yet to test its bullish trendline. Currently trading within a 120-pip range after falling from its 2019 highs, a bearish divergence formed with RSI before rolling over and prices are trading near the lows of the 1.7121-1.7240 range.

  • Given the strength of momentum from the 1.7893 high, and EUR/NZD’s tendency to produce large swings, the bias is for a bearish breakout and run towards the lower trendline.
  • Traders could wait for a break of the 38.2% Fibonacci ratio for confirmation of a break, and use 1.7000 as an interim target where the 200-day MA and 50% retracement level reside.
  • A break above 1.7240 today assumes Draghi delivered the goods and the near-term bias flips to bullish. However, we’d continue to monitor price action for a potential topping pattern (or a lower high) as we suspect the leg lower from the 2019 high has more to give.
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