I don’t seem to be seeing much momentum on my other short Kiwi idea, so I’m turning my attention to this EUR/NZD reversal pattern on the weekly chart.
Long EUR/NZD Idea
Euro bulls seem to be prepping for a long-term charge against the Kiwi as this pair has completed a double bottom reversal pattern on its weekly time frame.
If you tilt the neckline a bit and look at the earlier low, it could work as an inverse head and shoulders, too. Or am I just seeing things after having too much coffee?
In any case, price appears to be pushing past the neckline and area of interest around the 1.7500 handle, and a few more bullish candles might be enough to confirm that an uptrend is taking place. Now this chart pattern is approximately 3,000 pips tall, which means that the pair could climb by at least the same height!
I’m euro bullish mostly because it has been one of the top-performing currencies in the past weeks, likely drawing most of the safe-haven gains away from the shaky dollar. To top it off, anticipation for an ECB hike continues to keep the shared currency supported.
On the flip side, the Kiwi is on weak footing owing to the RBNZ’s more downbeat stance shared in their latest statement. Trade jitters are making things worse, along with bouts of risk aversion stemming from emerging market troubles.
I’m hoping to catch a short-term pullback before hopping in, though, possibly around the nearby area of interest at 1.7400. The problem is, price is barely showing any signs of retracing for now, so I guess I’ll just have to remind myself to be patient. A lot can still happen anyway and the market doesn’t run out of opportunities, right?
What do you guys think? Are you trading the euro or Kiwi, too?
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