EURNZD Trendline & Hawkish ECB Bias Support Bullish ContinuationEURNZD is holding beautifully above the ascending trendline on the 4H, and I’m watching this level closely for a bounce continuation setup. Fundamentally, the euro remains supported by sticky inflation and hawkish ECB commentary, while the kiwi is showing softness after dovish signals from the RBNZ and mixed jobs data. If this trendline holds, I’ll be targeting a retest of the upper wedge resistance near 1.9640.
🔍 Technical Setup (4H):
Structure: Ascending triangle forming – price is pressing into dynamic support.
Support Zone: Around 1.9480 trendline area – price rejected this level several times in July.
Resistance Target: 1.9640 highs – double top and triangle resistance.
Bullish Confirmation: Rebound with bullish engulfing or strong 4H close above 1.9525 could trigger long setup.
Invalidation: Clean break below trendline and 1.9440 invalidates bullish scenario short-term.
💡 Fundamental Insight:
EUR Drivers:
ECB members remain cautious about declaring victory on inflation.
German and Eurozone CPI data remain above target, supporting higher-for-longer ECB stance.
Speculation that ECB won't cut aggressively compared to RBNZ.
NZD Weakness:
RBNZ minutes show concern over downside inflation risks.
Labor market cooling, and migration pressures remain high.
Commodity and China-linked sentiment weakening NZD.
⚠️ Key Risks:
If Eurozone inflation or PMI data surprises to the downside, EUR may weaken.
RBNZ hawkish pivot or surprise tightening would flip sentiment toward NZD.
Global risk-on could favor NZD as a high-beta currency.
🧭 Summary:
I’m bullish on EURNZD as long as price holds above the trendline near 1.9480. The technical structure shows a clean ascending pattern, and the fundamentals currently favor EUR strength over NZD. My eyes are on a potential move toward 1.9640, especially if upcoming ECB rhetoric stays hawkish. EURNZD tends to lead NZD-crosses like NZDJPY or NZDCHF in risk-off regimes and could signal euro strength if it breaks out. Watching closely for price action confirmation.
