EUR/NZD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
From a technical standpoint, we have a strong bearish case in the four-hour chart of EUR/NZD. The currency pair has just bumped into the upper boundary of the descending channel that emerged as a result of the price bouncing off of the 10-month resistance down-trend. The Euro is thus expected to decline from 1.56 down to the lower bound of the channel at 1.51/50.

The main argument against the decline is positioning in the SWFX market, where as many as 70% of participants are already short. In case the price closes above 1.56, it will open a path towards the monthly pivot point at 1.5850, followed by the long-term moving average at 1.6040.
© Dukascopy Bank SA
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