EUR/NZD poised for bullish break out
The EUR/NZD might not be everyone's cup of tea, but this volatile pair looks like it is about to stage a breakout. We have seen a big upsurge in European stock markets of later while the euro has also outperformed. Take a look at the EUR/CHF and EUR/GBP to get a fell for its underlying strength. The EUR/NZD could be another euro cross about to break higher.
Investors have been pricing out risks that had been associated with EU markets, including a sharp recession in the eurozone and rationing of gas. But thanks to a mild winter so far, an energy crisis has been averted. Meanwhile economic data has not been as bad as feared. In addition, China’s re-opening has boosted hopes over Eurozone exports, especially given the big drop in shipping costs.
The euro has been further supported by hawkish comments from the ECB President Christine Lagarde who in December said the market should be expecting the central bank to raise interest rates at a 50 basis-point pace “for a period of time.”
The euro thus remains supported for now.
From a technical point of view, the EUR/NZD pair is looking increasingly bullish as it continues to hold above the 21-day exponential average. The bullish price structure here has lifted the pair above 1.6950 today. If it can hold above this level, we could see fresh buying momentum come into play.
The EUR/NZD has already reached and surpassed the 1.70 handle. Next up could be the 61.8% Fib retracement level at 1.7090.
By Fawad Razaqzada on behalf of FOREX.com
Investors have been pricing out risks that had been associated with EU markets, including a sharp recession in the eurozone and rationing of gas. But thanks to a mild winter so far, an energy crisis has been averted. Meanwhile economic data has not been as bad as feared. In addition, China’s re-opening has boosted hopes over Eurozone exports, especially given the big drop in shipping costs.
The euro has been further supported by hawkish comments from the ECB President Christine Lagarde who in December said the market should be expecting the central bank to raise interest rates at a 50 basis-point pace “for a period of time.”
The euro thus remains supported for now.
From a technical point of view, the EUR/NZD pair is looking increasingly bullish as it continues to hold above the 21-day exponential average. The bullish price structure here has lifted the pair above 1.6950 today. If it can hold above this level, we could see fresh buying momentum come into play.
The EUR/NZD has already reached and surpassed the 1.70 handle. Next up could be the 61.8% Fib retracement level at 1.7090.
By Fawad Razaqzada on behalf of FOREX.com
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