This article was first published on Orbex Forex Trading Blog.
This content is synced from the rightful owners. Copyright on text and images belong to the original source.
EURNZD has recorded a continued bearish move from the high of 1.9925 to the low of 1.7163. The momentum indicator, however, showed a hidden bullish divergence that was followed by a bullish standard divergence. This is often a signal for a trend reversal.
Bulls have moved far from 1.7326, which is the cross of the Tunkan-Kijun lines and remained above the Tunkan at 1.7574.
The 23.6% Fibonacci retracement at 1.78 could be hit should this drive continue. Deeper targets are marked at 38.2% and 50% Fibonacci retracements, at 1.8211 and 1.8537 respectively.
In the short-term, the 3h momentum indicates a hidden bearish divergence. This suggests that momentum is exhausting and we could expect a pullback. This is further supported by a false break we could be seeing just above the Tenkan line.
Bears could send prices near the current Tenkan-Kejun confluence level at 1.7578. Further weakness could then move prices to the 61.8% extension of the 1.7164-1.7493-1.7271 leg. This is near 1.7472.
To keep reading this article, please navigate to: Orbex Forex Trading Blog.