the EUR/NZD uptrend continued higher as expected after building a retracement at the -27.2% Fibonacci target.
Now the bullish momentum seems unstopable as price is racing higher and higher.
How are far can price move up? And are there any potential entries? Time for a closer look.
Last’s week strong bullish weekly candlestick leaves little doubt about how far bullish intentions of the EUR/NZD. The weekly candle size is an impressive 590 pips and the close was only 42 pips away from the high. This means that the bullish candle close had less than 10% wick on top of the candle and indicates a dominant bullish candle.
The candle also broke above the -27.2% Fibonacci target which signals the continuation towards the next major target: the -61.8% Fibonacci level. At that spot around 1.7286 there is also a major resistance level (red) from the previous tops. Around that area there is also the resistance line of the uptrend channel (green lines).
The bullish structure and target seem clear at the moment. Price broke above multiple resistance trend lines (dotted orange) in the past and has cleared all obstacles.
The main question now is whether price will build a retracement or not? Both scenarios are possible and price could either breakout immediately next week (blue arrow) or build a small correction first before continuing higher (green arrows).
Time to look at the lower time frames to get a better answer.
The EUR/NZD is building a neat triangle chart pattern after massive bullish price action. Price moved up more than 500 pips in a a couple of hours and it seems very unlikely that this bullish momentum would fade away anytime soon.
With this in mind, there are two main scenarios that seem most likely:
The first target on the 1 hour chart is 1.7070. This is where the -27.2% target and the 6th Wizz level are located. Eventually I am expecting price to reach the main target at 1.7286 but the road between 1.7070 and 1.7286 will be choppier and bumpier.
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