The euro initially tried to shoot higher against the Kiwi dollar during the trading session on Friday, but as you can see we have a bit of a down trending channel going, and it has held as resistance. The euro has struggled against several currencies around the world, and it looks at this point as the Asia sensitive currencies are doing fairly well.
From a technical analysis perspective, we are at the top of the trading channel at the highs of the day, and of course the 50-day EMA has offered quite a bit of resistance. The downside isn’t exactly guaranteed, but if previous performance is in fact indicative of the most likely scenario, then it appears that we will go looking below the 1.65 handle, perhaps closer to the 1.64 handle.
Perhaps this is partially in reaction to the anticipation of good news coming out of the US/China trade talks, which of course is good for both the Australian and New Zealand dollars. On the other side of the trade is the Euro, which although showing signs of stability against the US dollar, the economic numbers out of the European Union aren’t exactly great. Beyond that, the RBNZ was a bit more upbeat recently, hence the large negative candle that formed last week.
Selling the rallies should continue to be a strategy most traders will employ, and the shooting star that is forming for the Friday session shows where the real bias is. Granted, there is significant support underneath but it does look like we have an opportunity for a continuation trade setting up as we get ready for next week’s action. That being said, if we break above the 1.68 level, then it changes things for the market, and we can begin to look at longer-term trades.
