EUR/NZD traded lower during the European morning Wednesday, after it hit resistance at 1.7230, near the 200-EMA. The pair has been printing lower peaks and lower troughs below a downside resistance line since August 30th, and thus, we would consider the near-term outlook to be negative for now.
That said, we would like to see a decisive dip below Monday’s low, at 1.7115, before we get confident with regards to a trend continuation. Such a move would confirm a forthcoming lower low on the 4-hour chart and may initially pave the way towards an intraday swing low formed on August 5th, near 1.7026. Another break, below 1.7026, could carry more bearish implications, perhaps paving the way towards the 1.6930 zone, defined by the inside swing highs of July 31st and August 1st.
Our short-term oscillators, the RSI and the MACD, detect negative momentum and support the notion for some further declines. The RSI hit its 50 line from underneath and turned down again, while the MACD, although above its trigger line, lies within its negative zone and has just turned south as well.
In order to start examining whether the bears have abandoned the battlefield, we would like to see a rebound above 1.7230. This would bring the rate above the aforementioned downside resistance line and may allow a test near the 1.7285 zone, marked by the inside swing lows of September 4th and 5th. A break above that hurdle could extend the recovery towards the 1.7365 area, near the highs of those days, the break of which may set the stage for the high of September 3rd, at around 1.7435.
