I’ve been diving into the technical landscape of the
EURNZD pair today, and honestly, the confluence of signals I’m seeing is hard to ignore. When I break down this chart, I’m looking at a very specific interplay between weekly pivot levels, baseline indicators, and a classic structural shift that suggests the bears are firmly in the driver’s seat.
The Context: Overbought Signals Looking back at the peak of the American session on
April 7, the
Vertex indicator sent a clear warning: the pair was heavily overbought. As expected, that signal was immediately followed by a sharp price drop. What makes me confident about this setup is that the initial bearish momentum was reaffirmed earlier today during the European session. It’s not just a one-off spike; the market is actively confirming that the previous highs were unsustainable.
Identifying the Bearish Momentum When I zoom out to look at the moving averages, the picture becomes even clearer. Both the
200-period and 50-period moving averages are sloping downward, confirming a robust and established downtrend. In trading, you always want the "big money" trend at your back, and right now, the long-term averages are completely aligned with the bearish outlook.
The most compelling part of this setup, however, is the structural formation. The sellers have successfully carved out a
1-2-3 pattern. This is a classic reversal or trend-continuation sequence that shows a clear shift in market psychology. The bears didnt just suggest they were in control; they proved it by aggressively breaking through the
2.02547 level. This breakout is the definitive "stamp of approval" on the 1-2-3 pattern, showing that the sellers have the volume and the conviction to push this pair lower.
My Execution Plan Despite the obvious downward pressure, I’m not interested in chasing the price at its current lows. As a disciplined trader, I know that the most favorable risk-to-reward ratios often come from waiting for a "retest" of broken levels or key pivots. Here is exactly how I’m planning to play this:
The Entry: I am waiting for a temporary pullback or "retracement" to the
weekly pivot resistance level at 2.01651.
The Action: Once the price reaches this pivot, I’ll be looking to open a
short position.
The Logic: Entering at the weekly pivot allows me to join the dominant downtrend while keeping my stop loss tight, as I expect this level to act as a firm ceiling for any corrective bounces.
Final Thoughts The EURNZD is currently offering a textbook example of how different technical tools—Vertex for overbought conditions, moving averages for trend direction, and the 1-2-3 pattern for structure—can all point to the same conclusion. My plan is set: I’m staying patient, waiting for that retracement to 2.01651, and then looking to ride the next leg of this bearish move down. By waiting for the pivot, I’m letting the market come to me rather than forcing a trade in the middle of a move. Lets see if we get that pullback before the next major sell-off begins.
