EUR/NZD has been in a massive selling spree over the past couple of trading days, pushing the pair all the way down by at least 150 pips. Using the Fibonacci retracement tool on the 1-hour time frame though shows that the 61.8% Fib level has already been reached and may act as support moving forward.
Data from New Zealand has been relatively strong though, but it remains to be seen whether euro zone reports could trigger a bounce in price. Take note that the pair is currently stalling around an area of interest near the 1.6100 major psychological support.
A bounce from the current levels could mean a rally up to the previous highs near 1.6280. On the other hand, further declines could see the pair back down to the previous lows around the 1.6000 major psychological handle.
Going long at market if the euro zone reports are strong and aiming for 1.6280 with a stop of 100 pips could yield a 1.5-to-1 return on risk.
By Kate Curtis from Trader’s Way