FOREX Chart Of The Day: EURNZD- Is The NZD Strength Here To Stay
Is the New Zealand Dollar strength here to stay?
In this video update, we discuss the Coronavirus pandemic and how that could see the New Zealand Dollar outperform the other major currencies.
EURNZD is a great example of the NZD strength as price finds new lows.
But will this trend continue?
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
Practice trading with a demo account
In this video, we will be taking a look at the NZ Dollar in more detail as we could expect a little bit of a long-term bullish move from the currency.
Now, the reason being is, early this morning, we had some data out of the New Zealand employment figures, and essentially, they showed us that employment or unemployment first fell quite dramatically and employment gained quite dramatically as well. The last numbers for employment were minus 0.7%, and they rose to 0.6% and we had the previous unemployment rate of 5.3%, then came out at 4.9% So again, a big drop on the unemployment rate.
We could see this continue moving forward. The reasons are: we’re still in the middle of this pandemic and New Zealand has coped well and is continuing to open up places. They’re continuing to run normally, which could give them a little bit of a head start compared to the rest of the world. If they’re moving normally, they’re more likely to have their economies continuing to boost rather than, let’s say, the Eurozone where the numbers in Europe are continuing to climb. They’re not rolling out the vaccines as quickly as other places.
It is why I chose the EUR/NZD chart. If that’s the case, we could see some long-term downside in this market and what I’m looking for, in particular, is for the market to come back down into some key levels. We have a nice area of support, around 1.64. We’ll draw that on the charts, around this area, here. The market has found some decent support in the past and we’ve rallied significantly from that point. However, the price is now heading back towards it. We can see that we’re in a slight downtrend, here, with the markets making lower lows and lower highs, and it’s continuing to compress to the downside, very bearish in this move here. Looking towards the daily timeframe as well, where we’ve recently broken out of some consolidation.
What I’d be expecting from EUR/NZD now is that further downside. Now that the trend starts to continue, we could be looking for the price to pull back into this area and then continue to the downside. If it does that, then we’ve got a few hundred pips to work with here for some downside; around 300 pips if the price can pull back into this area to then go short.
Keep an eye on EUR/NZD. The long-term effects of the pandemic could benefit the NZDollar moving forward. Especially against the EUR, even the GB Pound could be the one to consider as those economies will be affected in the long-term from this pandemic.
Keep an eye on this, and I’ll speak to you soon.
We hope our Forex Chart of the Day analysis helps you in your trades. Go ahead and practice trading the EUR/NZD pair with free $50,000 funding when you sign up for a free demo account at Blueberry Markets.