I’m seeing a new long-term channel forming on the daily chart of EUR/NZD, but I’m gonna wait to see if support holds first.
Long EUR/NZD Idea
This pair has formed higher lows and higher highs on its daily time frame but has yet to confirm the formation of an ascending channel on this latest support test.
A bit of upside momentum seems to be returning, especially since stochastic is already indicating oversold conditions or exhaustion among sellers. A bounce could take price back to the channel top or at least until the mid-channel area of interest around 1.7300.
EUR/NZD Daily Forex Chart
Higher-yielding commodity currencies started the London session on weak footing as traders remained wary of trade tensions between the U.S. and China. As it is, markets are waiting to hear if Uncle Sam will push through with its next batch of tariffs by December 15.
Doing so would put more downside pressure on the likes of the Kiwi, as it would potentially extend the tit-for-tat trade war between the nations. And with the dollar likely to take some hits as well, traders might flock to other safe-haven alternatives like the euro instead.
I haven’t set any entry orders yet but I’m looking to enter once stochastic pulls up from the oversold region, reflecting more upside momentum. I’ll set my stop below the channel support and recent lows, which would also put it below the 1.6800 mark. As for my target, I’m setting my sights on the 1.7300 area first.
What do you guys think?
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