EUR/NZD Bearish Breakout after ABC Pullback at 144 EMA

The EUR/NZD is in an established downtrend. Price has recently made an ABC pullback towards a heavy resistance zone (red box). What’s next?

4 hour chart

The EUR/NZD needs to break below the 21 ema zone and the support trend line (blue) to confirm the downtrend continuation (green check). A breakout, flag, and continuation pattern would be the best pattern for any potential short setups. The main targets are the round level of 1.70 and 1.6925.

A break above the long-term moving averages would break indicate a break above resistance and invalidate (red x) the bearish outlook. The current pullback is probably an ABC (blue) wave in wave 4 (purple). The bearish breakout could complete a wave 3 (purple).

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter