In the forex market, everything is determined on a relative basis. The best outcomes for trades come when we find currency pairs that are polar opposites in strength and fundamental stability. It is always wise to value both currencies instead of just one. How do we determine what is weak and what is strong? The normal process of qualitative valuation, like is performed on the stock market, does not fully apply. People who do not trade the financial markets often assume a currency is stable and fixed. That is just not true. In the forex market, the change in price of the instrument is twofold and if you forget to value, the other side of the pair you are operating based on luck.
EURNZD
This currency pair has gone through some wild gyrations in the past session. This was due to the Reserve Bank of New Zealand announcing that it will keep interest rates where they are but giving direct guidance of a future rate cut. We know that the current state of markets produces extreme volatility not only when fundamentals change, but also when the promise of a change is encountered. The Euro is plagued with many risks, including political, economic and ECB fiscal policy changes. The New Zealand dollar on the other hand looks surprisingly strong.
The pair has broken through local support at 1.6535 and retraced back today. If tomorrow is a bearish day, we recommend opening a short position with a target of 1.6400.
EURNZD
This currency pair has gone through some wild gyrations in the past session. This was due to the Reserve Bank of New Zealand announcing that it will keep interest rates where they are but giving direct guidance of a future rate cut. We know that the current state of markets produces extreme volatility not only when fundamentals change, but also when the promise of a change is encountered. The Euro is plagued with many risks, including political, economic and ECB fiscal policy changes. The New Zealand dollar on the other hand looks surprisingly strong.
The pair has broken through local support at 1.6535 and retraced back today. If tomorrow is a bearish day, we recommend opening a short position with a target of 1.6400.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.