Forex Trade Update: EUR/NZD Resistance Turned Support

And I’m in! I’ve decided to enter a small forex position on EUR/NZD at market (1.6825) prior to the economic events in New Zealand then added another long entry when I saw further confirmation. If you’re wondering what I’m talking about, make sure you check out my initial EUR/NZD trade idea first.

The pair is currently testing support at the 61.8% Fib and 1.6750 minor psychological level and has just formed a spinning top, suggesting that a bounce might be in order. I was able to hop in another long position at 1.6765 with a stop below the swing low and a profit target near the previous highs.

EUR/NZD 4-hour Forex Chart

EUR/NZD 4-hour Forex Chart

While the Global Dairy Trade auction in New Zealand showed a healthy 14.8% pickup in prices, I’m thinking that this could just be a quick correction from the steady declines over the past months. Besides, the quarterly PPI showed a 0.3% decline in input prices and a 0.2% drop in output prices, hinting that consumer inflation could see more downside pressure later on.

As for the euro, it seems that Greece’s bailout funds are within arm’s reach as no less than German Chancellor Angela Merkel herself is trying to convince the IMF to get on board. She mentioned that they’re willing to consider debt relief in order to help the country meet its budget targets – a requirement that the IMF demanded before deciding to cough up more cash.

Upcoming event risks for this trade include the euro zone PMI reports on Friday and the usual commodity price movements. I’ll also keep close tabs on today’s FOMC minutes release to see if it could have a significant impact on overall market sentiment. Anything else I should look out for with my long forex trade?

Cheers,

Happy time

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  • Christophe

    Looks like a beautiful trade, well done! Looking forward to the post trade summary.

    • Thanks for the positive feedback and for checking out my blog! Trade review is up!