In the weekly forecast I shared with you in this article, the EURNZD sell trade idea was discussed. The pair made a nice move lower scoring around 80+ pips and it is time to think about what’s next.
Here is a quick recap of the setup.
EURNZD Sell Trade Setup
On the Daily chart we saw a triple cycle starting from the end of July 2019 and completing the cycle with the swing high on November 16th at 1.7700. Ever since, the price started developing a bearish trend, forming a bearish channel as shown in the screenshot below.
The RSI triangle formation was broken down and the indicator started trading below 50.
This is where, we saw the price bouncing off of the bearish channel on the H4 chart and the expectation for continuation lower, at least until the point a bullish divergence appears came in play.
This is exactly what we got – price pushed lower below the swing low formed at 1.7130 and formed bullish divergence. Even though I still expect the pair to continue lower as long as the price remains inside the bearish channel, it might be a good idea to cash out partially (at least).
Yours to success,