Trade of the Day: EUR/NZD

By: Dima Chernovolov

EUR/NZD continues to fall inside the hourly Down Chanel chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Down Chanel at the 6-bar level – which reflects the medium Initial Trend (5 bars), lower Uniformity (3 bars) and strong Clarity (8 bars). EUR/NZD is expected to fall further inside this Down Chanel – in line with the earlier breakout of the support area highlighted below.

As can be seen from the daily EUR/NZD chart below, this Down Channel encloses the strong daily impulse wave from the key resistance level 1.7560 – which today broke the support area lying between the support level 1.7210 (which also stopped the previous correction in August) and the 38.2% Fibonacci correction of the previous upward impulse from July.  This price area is acting as resistance zone after it was broken. The proximity of this resistance area increases the probability EUR/NZD will continue to fall inside this Down Chanel.