• EUR/NZD strengthened on Wednesday as investors dumped kiwi dollar after the Reserve Bank of New Zealand announced it would keep rates at 0.25%, defying expectations.
• The central bank was expected to be the first in the Asia-Pacific region to hike rates since the pandemic began, but quickly switched gears after the country put into a snap lockdown after new COVID 19 cases.
• EUR/ NZD rally lifts the pair above 1.7000. A break and daily close above 1.7064 (23.6%fib) will accelerate further gains.
• Technical signals show the pair could gain more ground in the short-term as RSI is at 60 bullish, daily momentum studies 5, 9 and 11 DMAs are trending up.
• Immediate resistance is located at 1.7064 (23.6%fib), any close above will push the pair towards 1.7090(Higher BB).
• Strong support is seen at 1.6994 (38.2%fib) and break below could take the pair towards 1.6934(50%fib).
Recommendation: Good to buy around 1.7000, with stop loss of 1.6900 and target price of 1.7100
