- EUR/NZD trades a narrow range, capped below 5-DMA at 1.6112.
- The common currency under pressure in light of last week’s ECB minutes. Markets also remain wary ahead of the Jackson Hole Symposium.
- ECB minutes showed that members were worried over the exchange rate appreciation and felt that accommodation was needed in either direction.
- Technical studies are bearish, we see scope for downside on the pair.
- Stochs have rolled over from overbought levels and MACD is on verge of a bearish crossover.
- 20-DMA at 1.5949 is immediate support. Breach there could see test of trendline at 1.5780.
- Bearish invalidation only on breakout above major trendline resistance at 1.6240.
Support levels - 1.60 (Aug 17 low), 1.5949 (20-DMA), 1.5842 (23.6% Fib retracement of 1.4534 to 1.6246 rally)
Resistance levels - 1.61, 1.6111 (5-DMA), 1.62, 1.6240 (trendline)
Call update: We had advised a short call on the pair (http://www.econotimes.com/FxWirePro-EUR-NZD-fails-at-major-trendline-resistance-at-16240-good-to-short-rallies-859630).
Recommendation: Bias lower. Stay short, hold for targets.
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