The European Central Financial institution (ECB) is up right this moment!

Will the central financial institution members’ resolution lengthen the euro’s losses towards its a few of its counterparts?

In case you had been watching different EUR pairs, you need to know that EUR/NZD has been in an observable downtrend since hitting resistance on the 1.7840 ranges.

The pair is now buying and selling nearer to the 1.7450 space after hitting new month-to-month lows close to 1.7400.

EUR/NZD 1-hour Foreign exchange Chart by TV

Can the pair nonetheless lengthen its losses?

The 1-hour chart hints that EUR/NZD went again inside its descending channel sample after a quick journey to the 1.7400 lows.

If we zoom in on the 15-minute time-frame, we are able to see that the following potential short-term resistance is across the R1 (1.7530) of right this moment’s Normal Pivot Factors.

Not solely is it close to the mid-channel resistance, but it surely’s additionally near yesterday’s highs and the midway level of EUR/NZD’s day by day common volatility.

EUR/NZD 15-minute Foreign exchange Chart by TV

Right now’s ECB resolution may take EUR/NZD to the potential resistance that we’re taking a look at.

Markets see President Lagarde and her staff elevating their rates of interest by 25 foundation factors and certain trace at additional price hikes within the foreseeable future.

However based mostly on how EUR reacted within the earlier price hikes, and based mostly on how markets finally turned towards USD after Powell’s presser, EUR may flip decrease regardless of a price hike.

This is the reason I’m extra bearish than bullish on EUR/NZD within the subsequent couple of buying and selling classes.

EUR/NZD may spike to 1.7550 – 1.7560 in the course of the ECB occasion earlier than revisiting its earlier lows close to 1.7450.

It may even drop to 1.7400 if merchants determine to dump USD and take “dangerous” bets like NZD forward of the weekend!

In fact, I’m keen to focus on increased resistance zones if EUR finally ends up extending its positive factors after the ECB occasion.

However for now, I’m watching out for a possibility to brief close to the mid-channel resistance and concentrating on EUR/NZD’s 1.7450 – 1.7400 earlier lows.

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