EUR/NZD 4H Chart: Rising Wedge

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Despite EUR/NZD standing right at the multi-month up-trend (thick black line), it might be risky to go long just yet. The reason is the rising wedge, a pattern that suggests a reversal. The price opened sharply lower this week, and the bears could attempt to push the rate lower. A breach of 1.65 will be a strong sell signal, and the nearby supports, such as 1.65 (Jul 9 low and 200-period SMA) and 1.6043 (Jun 29 low) might not be able to stop the decline. Nevertheless, the technical indicators are mostly pointing upwards, and it might be a reasonable idea to wait for a confirmation of a recovery, which is supposed to be the Euro gaining a foothold above 1.68 (Jul 16 high).
© Dukascopy Bank SA
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