EURNZD Monthly, weekly and daily analysis
On the monthly timeframe we can clearly see that after an extremely impulsive downward movement, the european currency has progressed with a further downside consolidation, touching the long term minimum of 1.4 in 2015.
Right after that, the cross has abruptly made a very strong upward impulse, followed by a more structured pullback correction, which seems to be close to it's end. From a structure perspective, the couple could be forming a bearish long term harmonic butterfly pattern. Deeper overview on the weekly and daily timeframes, as well as potential setups analysis on smaller timeframes will follow.
Right after that, the cross has abruptly made a very strong upward impulse, followed by a more structured pullback correction, which seems to be close to it's end. From a structure perspective, the couple could be forming a bearish long term harmonic butterfly pattern. Deeper overview on the weekly and daily timeframes, as well as potential setups analysis on smaller timeframes will follow.
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On the weekly timeframe, you can clearly see the pair going through an impulse/correction/impulse movement, with a final destination price of 2.1 in the long term.
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On the daily timeframe, the pair shows a strong divergence with a notable shift in purchase volumes throughout subsequent minimums.
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Still on the daily timeframe, we can see the corrective structure coming to an end. It is not a question of if, but a question of when. It is probably going to make a sudden impulse upward somewhere between the 0.786 and the 0.886 Fib, or possibly retest the previous low. Either way, this represents a buying opportunity for us. Setup updates on smaller timeframes will hopefully follow.
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The pair seems to have formed a bullish H&S pattern on smaller timeframes (60min chart). Pattern is not confirmed, will only be confirmed when price breaks the neckline. However, the time is mature for a big upward movement, as all the conditions are there. If you have not entered "at" the market, wait for a pullback or flag after the price has broken the neckline. Stop loss below head and target price in the 1.489 area.
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The big question on the EURNZD pair is: what is the timing of it all ?
Here you can see a potential development on the daily timeframe. Given the humongous amount of time the correction took to go from the 0.618 to the 0.786 Fib, chances it could be still a few months for it to leave. Because there is no crystal ball for this, a strategy could be to place a buy order at 1.45 (0.886 Fib) with a Stop Loss at 1.384 and a final target at 1.9, with a R/R of 1/6.4.
Here you can see a potential development on the daily timeframe. Given the humongous amount of time the correction took to go from the 0.618 to the 0.786 Fib, chances it could be still a few months for it to leave. Because there is no crystal ball for this, a strategy could be to place a buy order at 1.45 (0.886 Fib) with a Stop Loss at 1.384 and a final target at 1.9, with a R/R of 1/6.4.