• EUR/NZD dropped sharply on Thursday as euro attracted sellers after soft German and Spanish Inflation data weighed on euro.
• German inflation eased to 2% in August, falling short of the 2.3% forecast by analysts, according to recent data. In Spain, prices also declined more than anticipated, with EU-harmonized inflation registering at 2.4% in August.
•The data bolstered expectations that the European Central Bank might implement another rate cut in September, as policymakers have emphasized the importance of a continued decline in inflation.
• The technical outlook remains bearish and points to eventual bigger losses, Fourteen-day momentum is negative, reinforcing the scope for a bigger slump
• Immediate resistance is located at 1.7826(50%fib), any close above will push the pair towards 1.7266(Aug 28th high)
• Support is seen at 1.7655(38.2%fib) and break below could take the pair towards 1.7587 (Lower BB)
Recommendation: Good to sell around 1.7720, with stop loss of 1.7800 and target price of 1.7630
