Overview:
Recently, EUR/NZD has been moving sideways around the level of 1.5910. In the daily time frame, I found a supply bar and a strong head-and-shoulders confirmed formation (a broken neckline). In the H4 time frame, the pair is trading well below 50, 100, and 200 SMA. I found 2 climatic actions in a background and a strong up-thrust bar in a ultra-high volume (sign of weakness). In the M30 time frame, I found a bearish flag, and we may expect further downward continuation. First support is found at the level of 1.5865. Strong support held like strong resistance at the level of 1.5990. Be careful when buying EUR/NZD at this stage since lower prices are expected. I placed Fibonacci expansion to find potential support levels. I got Fibonacci expansion 61.8% at the level of 1.6070 (broken), Fibonacci expansion 100% (almost tested) at the level of 1.5840, and Fibonacci expansion 161.8% seen at the level of 1.5470. If the price breaks the level of 1.5800 in a high volume, we may see potential testing of 1.5470.
Fibonacci Pivot Points:
Resistance levels:
R1: 1.5990
R2: 1.6010
R3: 1.6050
Support levels:
S1: 1.5910
S2: 1.5880
S3: 1.5850
Trading recommendations : Buying EUR/NZD looks very risky at this stage since the price confirmed the head-and-shoulders formation. Watch for potential selling opportunities.
