EUR/NZD near confluence of supports & looking to heading up 500 to 600 pips (27th November, 2022)

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EUR/NZD near confluence of supports & looking to heading up 500 to 600 pips (27th November, 2022)

EUR/NZD near confluence of supports & looking to heading up 500 to 600 pips (27th November, 2022)

  • :

attached is the daily chart of the pair, EUR/NZD

Rationale:

Technical View:

  1. The pair has been trading inside the congestion phase in medium term time frame for feb 2022- nov 2022 inside the range of  1.56000-1.75000 with near term bearish harmonic completing the correction in near price action ( given to only members).
  2. New upward move came in early August when the price touches the support line & started going up represented by the Elliot Wave structure completing the 5th wave almost truncated & now the corrective wave C is also completing the downleg inside ending diagonal (given to members) & looking to go up.
  3. Recent price action is working inside the falling wedge (blue parallel falling lines) & coming to the support of 200day MA forming the confluence of support area that increases the chances of move upwards.

***other important technical analysis in also given to the members that supports the view***

Fundamental View:

  1. RBNZ increased the interest rate yet another time by 75 bps to 4.25 percent which is a big move for RBNZ but markets were already expecting that & started pricing in weeks ago. That’s why , even after 75bps ,no big move came in New Zealand dollar & now the rate hike cycle of RBNZ might be coming to end which will pressure the New Zealand dollar.
  2. On the other hand ECB is going for 75 bps in December which in return will boost the EUR/USD which will also boost the EURO against other Majors & crosses.

***one strategy can be to buy EUR/NZD next week near 1.65000-1.64500 & when the ECB interest rate decision comes (wait for next 4hr candle to open according to the analysis) , sell the EUR/USD to hedge the position*** {buy the rumour sell the fact}.

PLAN :

buy the pair, EUR/NZD between 1.64500-1.65000 for the target of 1.70000 (if comes 1.61000 do add more as the medium term support is there  represented by the long blue support line)

 

Thank You,

Sanjay Galani, CMT, CFTe

Investment Director

UMA Network Ltd.