EUR/NZD Headed For Short-Term Dip?

Last updated 1/25/2010 2:22 PM EST (GMT -5) 0 Comments - Add your comment

FX360 Technical Analyst Staff

Technical Analyst, GFT

Although prices are currently flirting with near-term bull trendline support, the EUR/NZD is showing signs of at least a short-term dip based on a nearly confirmed bearish head & shoulders pattern. Typically, a neckline break triggers a relatively aggressive correction, which, in this case, also necessitates a bear trendline break which may add fuel to the fire, so-to-speak. In other words, a move below 1.9750 should be enough of a trigger to drive prices down to about 1.9680 followed by 1.96 based on converging Fibonacci support of the two distinct rallies leading into the patterns' head. If this does occur, stops would likely be placed just above the most recent near-term top prior to the trend/neckline break.

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