EURNZD at a supply zone

Launch Chart
Vasl Capital
EURNZD4H
Short
Aug 17 2021

Stop Loss -0.44%

Holding time 12hr

1.69700

Entry price

1.70450

Stop loss price

1

EURNZD has approached the resistance/supply zone on the H4 chart. On the higher time frames, the trend on EURNZD is still bearish as the Daily time frame has still not broken the previous high at 1.7050.

H4:
- Market structure: EURNZD has a bullish market structure forming HH’s and HL’s. The pair is currently at the resistance level with the supply zone confluence. This level was not tested earlier, hence a high probability of a short trade from this level. Apart from this, we also notice that higher time frames are still bearish and this resistance level is in confluence with higher time frame levels.
- Trendline: EURNZD has an ascending trendline forming, which is 50 pips below from where the market currently is. Other than this, we have a descending resistance trendline which has been tapped by the market at the resistance level. It will give us a second confirmation for short trade plan.
- Retracement: The golden retracement level of 75-78.6% has been pierced by the market, but the resistance level stalled it and market started to reject the zone. Until the resistance level is intact, we will consider this retracement level as a valid one.
- EMA's: Both EMA’s are bullish at the moment. The death cross of the EMA’s is still bearish, indicating a selling pressure following it. Both EMA’s were pierced earlier and have left a correction due on them. We anticipate a retest of the EMA 200, but as it does not align with the support level, we will wait for the EMA 50 at the support level as our potential profit targets.
- RSI/CCI: Both oscillators over extended themselves to the over-bought region. RSI going to 77 and CCI at 320. After tapping these extended levels, EURNZD bounced back down, trying to neutralize the levels. Once the oscillators enter the bearish region, it will be added confirmation for us to short.

Conclusion: BEARISH

EURNZD presents a good opportunity to go short. We will have to wait for the market to retest the supply/resistance zone and then take a position. If market breaks the resistance, we mitigate our losses and get out of the market.