EURNZD appears to be pulling up from its dive with the recent strong bounce, but this might represent a mere correction from the long-term slide. Applying the Fib tool on the latest swing high and low shows potential pullback areas.

In particular, the 50% retracement level could hold as resistance as this lines up with a former support zone. It also coincides with the 200 SMA dynamic inflection point. The 100 SMA is safely below the longer-term 200 SMA so the path of least resistance could be to the downside.

Stochastic is on its way up to suggest that buyers could be in control of price action for now. However, the oscillator is already dipping into the overbought zone to hint at rally exhaustion soon. If sellers take over, a drop back to the swing low could take place.

Earlier in the day, ECB Governor Draghi dropped hawkish hints in saying that the central bank might withdraw stimulus soon. This led to fresh speculations of tapering bond purchases, which could shore up the value of the shared currency.

Meanwhile, CFTC Commitments of Traders reports are hinting at extreme positioning for the Kiwi, which basically means that it could be hitting a top. In that case, profit-taking could weigh heavily on the currency at the end of the month and quarter.

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