Head and Shoulders Bottom Pattern Has Completed, and a Subsequent Decline Is Expected

Economic

Forex

Summary:

The Eurozone, as the world's second-largest economic bloc, derives support for the euro from its recovery momentum and monetary policy adjustments. Conversely, the New Zealand dollar is typically influenced by the country's economic cycle, agricultural exports, and Reserve Bank policy.

SELL EURNZD

Close Time

CLOSED

1.87179

Entry Price

1.84350

1.88500

2.01752 -0.00120 -0.06%

132.1

Pips

Loss

1.84350

1.88500

Exit Price

1.87179

Entry Price

1.88500

Fundamentals

The current EURNZD stands at 1.8687. This asset reflects the economic fundamentals of the Eurozone versus New Zealand.

Recent data from the Eurozone indicates moderate growth, with inflationary pressures gradually coming under control. The European Central Bank's (ECB) continued accommodative monetary policy stance remains a possibility. A relatively stable economic foundation supports the Euro.

New Zealand's economy is significantly influenced by agricultural exports and external demand, currently facing some downward pressure. The Reserve Bank of New Zealand's (RBNZ) policy inclination may remain dovish, potentially weakening the New Zealand dollar, thereby supporting EURNZD. However, from a technical structure perspective, the completion of a large-range head and shoulders bottom pattern suggests that this asset may be in a retracement phase.

Head and Shoulders Bottom Pattern Has Completed, and a Subsequent Decline Is Expected_1

Technical Analysis

The SMA system suggests that the EURNZD's short-term support level is approximately around 1.8650. A price correction that finds support at this level could potentially lay the groundwork for a further rebound.

Resistance levels are concentrated in the 1.8800 - 1.8850 range. A break of this area could trigger significant upward momentum.

In the 1D timeframe, the price is currently positioned slightly above short-term SMAs (such as the 10-day and 20-day SMAs), but remains near the medium-term moving average (like the 50-day SMA), indicating a consolidation.

Momentum indicators are in a neutral zone, showing no clear overbought or oversold conditions. The MACD indicator reveals a balance between bullish and bearish forces, although a slight golden cross has recently emerged, suggesting that bullish momentum may be gradually strengthening.

Given the current price of 1.8687 and key support/resistance levels indicated by the technical charts, a long position can be considered if the price finds support near 1.8600 and shows a rebound signal. The target can be set in the 1.8800–1.8850 range, with further upside potential if the resistance is broken. A stop-loss could be placed at 1.8550 or slightly lower to guard against a breakdown below the support level.

If the price fails to hold at the support level or shows clear bearish signals, bearish opportunities can be considered after a break below 1.8600, with a target near 1.8500. However, the overall bullish sentiment is currently strong, so caution is advised.

Overall, technical indicators suggest that the market is in a consolidation phase. Although initial bullish signals are emerging, the completion of a large-scale head and shoulders bottom pattern may indicate a pullback. Investors should prioritize risk management when positioning, set reasonable take-profit and stop-loss levels, and closely monitor subsequent technical indicators and market news.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.8720

Target Price: 1.8435

Stop Loss: 1.8850

Valid Until: March 19, 2025 23:55:00

Support: 1.8675, 1.8651, 1.8543

Resistance: 1.8742, 1.8850, 1.8880

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Head and Shoulders Bottom Pattern Has Completed, and a Subsequent Decline Is Expected

Fundamentals

Technical Analysis

Trading Recommendations

Risk Disclosure