EURNZD, time for a bearish correction?

Our setup for today is the EURNZD, where most recently, the buyers had a great time and most of the days in the second half of February and the beginning of March finished with a rise. To be precise, last seven trading days finished with the price closing a day above the opening.

It all started here with the bounce from the long-term up trendline (green). The chart you have here is a daily one but if you would look on H1, You would see that this bounce was made with an inverted head and shoulder pattern, which additionally supported the demand here.

After defending the long-term up trendline, buyers attacked the horizontal resistance on the 1.709. This is a place, where buyers can think about taking some profits, which may result in a bearish correction. That scenario is especially probable when we consider today’s candle, which so far is shaped like a shooting star. If the day will finish like that, we will receive a strong short/mid-term sell signal. As long as we stay above the green up trendline, the main trend stays bullish, which later should result in a test of the highs from November and December around the 1.74.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis