EURNZD – Bearish Reversal Expected from Channel Top ResistanceEURNZD has reached the upper boundary of a well-defined ascending channel on the 2H chart and printed a rejection wick, suggesting exhaustion and potential for a pullback. The pair is likely to retrace toward the channel midline or base, with downside targets near 1.9423 and 1.9264, assuming confirmation follows.
🧠 Fundamentals:
EUR Drivers:
ECB remains cautious with weak Eurozone inflation and rising recession risks.
Recent German and Eurozone data (retail sales, factory orders) disappointed.
Political instability in France and ECB’s dovish tone are capping upside momentum in the euro.
NZD Drivers:
RBNZ remains one of the more hawkish central banks, reiterating restrictive stance despite slowing inflation.
Dairy auctions improved recently, adding strength to NZD fundamentals.
China exposure is a double-edged sword — optimism helps, but slowdown risk remains.
🔍 Technical Structure:
Clear ascending channel from mid-June remains intact.
Price rejected perfectly at the upper trendline near 1.9585.
Strong bearish divergence may form if rejection persists.
Bearish scenario targets the 1.9423 zone first (support + midline), then 1.9264 (bottom of channel).
Invalid if price breaks and closes above 1.9600 on strong volume.
⚠️ Risk Factors:
A sudden euro bid from safe-haven demand or ECB surprise could break the channel.
NZD weakness could emerge if China disappoints or RBNZ shifts tone unexpectedly.
🔁 Leader/Lagger Dynamics:
EURNZD often lags risk-sensitive NZD pairs (like NZDJPY, NZDCAD), especially during Asia session moves. However, during European hours, EUR’s tone can dominate due to ECB speeches or EU data.
✅ Trade Bias: Bearish
TP1: 1.9423
TP2: 1.9264
SL: Above 1.9600
Event to Watch:
ECB speakers this week
China CPI/PPI (affects NZD)
US CPI (indirect cross-pressure on both currencies)
📌 Look for bearish confirmation on the 2H/4H candle close below 1.9540. Risk-reward favors a tactical short if the channel structure holds.
