EURNZD: 200 Breakout: Possible 500 points On Offer

EUR/NZD – Charts & Analysis

As of writing: Strength Vs Weakness Tables Standings

EUR is showing S3 and S2 (Strong) on the Trend and Day trading tables respectively
NZD is showing W1 (Weak) and W1 on the Trend and Day trading tables respectively

The chart above shows a bearish trend, anchored 08/20, formed 02/22
We also note the 1.71 resistance level
Below this we acknowledge 1.6325 prior support
Price has been seen to test and eventually break this level down only to return above it again, twice
ADX(W) is seen neutral, potentially crossing back to the bull side
Stochastics: Seen remaining very much in oversold territory

On the chart above we again acknowledge the 1.6325 / 1.7100 support/resistance levels respectively
We also note the addition of the 200 SDMA level, currently 1.6516
Today’s daily bar has opened with a bang, posting a 129 point upside move, breaching the 200
We also note today’s 162 point ATR1 and the 172 point average ATR14 (drawn from the ChartPartner MT Console, see the menu bar above)
ADX: Again we see a strong ADX reading clearly showing buyers in control, however trend strength remains weak below 25
Stochastics: Sto however remains very strong to the buy side

The current narrative appears to be to the upside, with buyers in control pushing price through the 200
The market appears to acknowledge the existence of a downtrend in the making, whist forming a bull trend within
Should this narrative continue we may well see a retest of the 1.7100 resistance handle
Alternatively, price stalls at the 200, reversing back to either minor trend support and possibly the 1.6325 support level

I’d like to see today’s bar close firmly above the 200 SDMA
Beyond that I’m happy to enter long, using the 200 as a safety barrier below which to place my stop.
I will be looking to target the 1.7050/1.7100 profit target zone
This is a slightly longer term play than usual for me, but with a potential 1:5 R:R on offer I’m happy to entertain such trades for as long as the current narrative continues

A removal of either of these currencies from my S/W Trading Tables (HERE) would of course negate this entire trade plan