EUR/NZD hits rising trend line; a sign of a bearish correction.
EUR/NZD is touching the ascending trend line, which has been standing since February 2017. In the short-term timeframe, the price has been developing within a narrow range over the last two months with upper boundary the 1.7100 psychological level and lower boundary the 1.6720 support, which overlaps with the lower Bollinger band.
Technically, in the daily timeframe, the RSI indicator slipped below the 50 level following the pullback on the positive territory. Additionally, the ROC oscillator approached the zero line, crossing it to the downside, suggesting further losses.
If price action drops below the uptrend line, there is scope to test the 23.6% Fibonacci retracement level at 1.6780 of the last big upward movement from February 2017 low to December 2017 high. Slightly below the aforementioned support, the 1.6720 level is the next immediate barrier. A breach of this level would shift the short-term outlook from positive to negative and drive the pair towards 1.6510.
In the event of an upside reversal, the upper Bollinger band near 1.7100 would act as a strong resistance level for the bulls. In case of a climb above it, could hit the 1.7480 high taken from the peak on December 1.
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