EURNZD Slide Limited to Confluence Level

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The EURNZD trades in an ascending regression channel as it maintains its push towards fresh highs. A rally towards the upper channel caused a rejection at 38.2% of the 1.99-1.7160 Fibonacci Retracement.

Prices are now hovering in the 1.80 psychological area, between Tenkan and Kijun.

The current momentum indicator shows an attempt to cross into lower values, forming a potential hidden bullish divergence. This could further support the upside bias which has been witnessed with previous bullish divergences.

A move to the downside eyes the first target being the lower regression channel. Should the lower channel break, then the next target could be the 23.6% Fibonacci retracement of the long-term bearish leg.

Reaching the lower channel will also mean that prices will attempt to re-enter the Ichimoku cloud, cementing the bearish move further.

eurnzd

In the short term, we are also witnessing a slight downturn towards the lower channel.

The momentum indicator also hints at a possible hidden bullish divergence with the expectation to fall lower. This move could then see prices engulfed into the Ichimoku cloud.

Further to this, the prices could then fall to the confluence of the short-term 32.8% and the long-term 23.6% Fibonacci retracement levels, around 1.78.

A bounce at the cloud could then see a revisit towards the top of the upper channel. Should the candle remain in the Tenkan and Kijun zone this could support the upside case.

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