Hello Traders,
FUNDAMENTALS
Generally speaking, the Euro hinges on political development in Germany and even if there will be challenges in forming a new coalition government, Merkel look most likely to remain Germany’s chancellor.
In the face of investors and Euro zone, the best way to resolve the current stalemate is through an election but then again it will be months before a new general election is held.
During that time, we might have another US rate hike and probably some progress in matters Tax Reforms. Remember the Senate sit through the tax bill this week and should there be consensus and the bill is passed, the USD shall rally.
That will be definitely negative for the common currency which has been benefitting from capital outflows from the US as uncertainty continues.
To New Zealand now and it is evident that the currency is bottoming after sustained sell pressure which saw it shed more than 6%.
The falling dairy prices, weak manufacturing and service sectors on top of soft spending couldn’t help the Kiwi.
At the moment though, we anticipate some correction and therefore we look to buy the Kiwi this week.
TECHNICAL ANALYSIS
Technically, there is a double tops and a stochastic sell signal which was printed on early November in the daily chart.
The same is replicated in the 4HR chart which has overbought stochastics and a sell signal in place in addition to a whole candlestick that formed outside the upper BB.
With the obvious divergence in the daily chart and confluence in sell signals, the path of least resistance is to the downside.
TRADE STRATEGY IN THE 4HR CHART
Trade as follows:
Sell: 1.7330
Stop Loss: 1.7430
Take Profit: 1.71, 1.68
Have a good day.

eurnzd 4hr chart-November 27, 2017

Source: Dalmas FX

eurnzd daily chart-November 27, 2017

Source: Dalmas FX

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