Apart from the yen, I don’t trade currency crosses very often. The price action can be choppy, and the spreads can sometimes be problematic if you aren’t careful.
However, if used sparingly, a cross like the EURNZD can offer opportunities where the potential reward is well worth the risk. Last week’s move may have given us one such opportunity.
Within the first 48 hours of activity last week, the pair traded to a high of 1.5483. The last time the Euro cross hit this mark was during the U.S. elections spike on November 9th of last year.
From the intraday charts, it looked as though buyers were determined to push prices even higher. But by the March 28th close, those same buyers had retreated in a way that they carved out a bearish pin bar from the 1.5450 resistance area.
The next three sessions were met with enough selling pressure to rechallenge 1.5215 support. In fact, Friday appears to have broken this level, which was instrumental in triggering the March 21st advance.
But there is one important question that needs answering before I’ll be ready to call this a confirmed setup.
Did last Friday break support at 1.5210?
If it did, we should see today’s session close (5 pm EST) below this area. If on the other hand, the pair closes today back above 1.5210, I’ll stand aside to see what comes of the next 24 to 48 hours.
One reason I need additional confirmation is that Friday was the last day of March as well as the end of the first quarter of 2017. For the uninitiated, the price action from these sessions can sometimes be unreliable, particularly when it lands on a Friday as volume tends to dry up.
As always, I’m in no hurry to trade the pair. But with more than 200 pips to the next key support at 1.50, the EURNZD is certainly one I’ll continue to watch.
However, if used sparingly, a cross like the EURNZD can offer opportunities where the potential reward is well worth the risk. Last week’s move may have given us one such opportunity.
Within the first 48 hours of activity last week, the pair traded to a high of 1.5483. The last time the Euro cross hit this mark was during the U.S. elections spike on November 9th of last year.
From the intraday charts, it looked as though buyers were determined to push prices even higher. But by the March 28th close, those same buyers had retreated in a way that they carved out a bearish pin bar from the 1.5450 resistance area.
The next three sessions were met with enough selling pressure to rechallenge 1.5215 support. In fact, Friday appears to have broken this level, which was instrumental in triggering the March 21st advance.
But there is one important question that needs answering before I’ll be ready to call this a confirmed setup.
Did last Friday break support at 1.5210?
If it did, we should see today’s session close (5 pm EST) below this area. If on the other hand, the pair closes today back above 1.5210, I’ll stand aside to see what comes of the next 24 to 48 hours.
One reason I need additional confirmation is that Friday was the last day of March as well as the end of the first quarter of 2017. For the uninitiated, the price action from these sessions can sometimes be unreliable, particularly when it lands on a Friday as volume tends to dry up.
As always, I’m in no hurry to trade the pair. But with more than 200 pips to the next key support at 1.50, the EURNZD is certainly one I’ll continue to watch.