FxWirePro: RBNZ leaves Kiwis vulnerable, EUR/NZD stern bullish engulfing wipes-off bears - Trade double touch calls and uphold long hedge

Both minor and major trends of EURNZD has been in bullish amid mild hiccups in the interim trend, the pair has formed symmetric triangle pattern with stern bullish candle today at triangle baseline which is most likely to spike above 21-DMAs and break-out triangle resistance (refer daily chart). On the contrary, bears popping-up at triangle resistance, the upswings have failed at that juncture.

While both technical indicators (momentum and trend oscillators) are in tandem with the minor uptrend. RSI and stochastic curves have shown gaining strength at 33 levels and upward convergence to the prevailing rallies, while fast stochastic curves show %k crossover which is again an indication of strength and intensified bullish trend. 

On a broader perspective, the major trend of this pair has also developed a rising channel pattern which is again bullish indication (refer monthly plotting), interim trend seems little edgy as the current price slides below EMAs with bearish crossover, both momentum oscillators have been indecisive with little bearish bias, however, RSI shows gaining strength  at 34 levels on this timeframe as well.

Trade tips: On daily trading grounds, at spot reference: 1.6545 levels, we advocate trading double touch calls, using upper strikes at 1.6563 levels. The strategy is likely to fetch leveraged yields as long as the underlying price keeps spiking on the expiration.

Alternatively, as we could foresee upside risks in the weeks to come on RBNZ’s surprising shift in its monetary policy today even though kept OCR rates on hold (at -1.75%), indicates rate cuts, we advocate initiating longs in EURNZD futures contracts of mid-month tenors with a view to arresting further upside risks. 

Currency Strength Index: FxWirePro's hourly EUR spot index is inching towards -77 levels (which is bearish), NZD at -88 (bearish), while articulating (at 06:20 GMT).

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex