EURNZD has recorded a continued bearish move from the high of 1.9925 to the low of 1.7163. The momentum indicator, however, showed a hidden bullish divergence that was followed by a bullish standard divergence. This is often a signal for a trend reversal.
Bulls have moved far from 1.7326, which is the cross of the Tunkan-Kijun lines and remained above the Tunkan at 1.7574.
The 23.6% Fibonacci retracement at 1.78 could be hit should this drive continue. Deeper targets are marked at 38.2% and 50% Fibonacci retracements, at 1.8211 and 1.8537 respectively.
In the short-term, the 3h momentum indicates a hidden bearish divergence. This suggests that momentum is exhausting and we could expect a pullback. This is further supported by a false break we could be seeing just above the Tenkan line.
Bears could send prices near the current Tenkan-Kejun confluence level at 1.7578. Further weakness could then move prices to the 61.8% extension of the 1.7164-1.7493-1.7271 leg. This is near 1.7472.
If prices remain in the cloud, a bullish attempt to 1.78 could occur. This is the confluence level formed by the long-term retracement and the short-term extension.