New Zealand Dollar, Euro, Canadian Dollar, Japanese Yen – TALKING POINTS
- EUR/NZD at risk of extending decline as compression zone narrows
- NZD/CAD uptrend losing steam? Capitulation could inspire selloff
- NZD/JPY may break out of congestive range and crack key ceiling
EUR/NZD has been on a downtrend since late March and appears to now be trading in a compression zone between descending resistance and stubborn support at 1.7172. The pair recently just brushed up against the slope of depreciation, potentially opening the door to retesting the floor. Breaking below the latter may amplify bearish sentiment and accentuate EUR/NZD’s losses.
EUR/NZD – Daily Chart
EUR/NZD chart created using TradingView
NZD/CAD has been travelling along an uptrend formed in late May, though recent price action suggests the pair may no longer be able to keep up with the progressive steepness of the slope. Consequently, NZD/CAD may capitulate and undergo a cooling off period before resuming the uptrend. On the other hand, a congestive interim could also precede a broad turn lower and possible retracement to support at 0.8668.
NZD/CAD – Daily Chart
NZD/CAD chart created using TradingView
NZD/JPY may challenge familiar resistance at 71.249 where the pair had previously capitulated back in early June. Climbing over it with follow-through could inspire additional sellers to enter the market. Conversely, a capitulation could signal the start of another directionless interim as seen back in February before the pair finally decided to turn lower.
NZD/JPY – Daily Chart
NZD/JPY chart created using TradingView
— Written by Dimitri Zabelin, Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitriTwitter