EUR/NZD forecast for December 10, 2020
Looking at the chart on the weekly time frame, we see that the bearish scenario is still very likely if the EUR/NZD pair deviates from the trend line with resistance at the top of the moving averages MA50 and MA100. While on the underside, the pair bounced off the MA200.
Before the global pandemic, the EUR/NZD pair was moving sideways between 1.65000 -1.75000, and we see that it is now returning to that parallel channel. We can expect that the pair will continue to move sideways before the next major movement on the chart in the next period.
We see the pullback and the potential FLAG pattern on the daily time frame, now only to monitor whether it will be realized to the end of the EUR/NZD pair will continue to fall because the wider picture is a bearish scenario.
The break below the moving average coincides with the lockdown of European countries while New Zealand has been in lockdown since March, and the number of newly infected is at a minimum. The news of vaccines has also helped smaller currencies such as the NZD as it has reduced global risk in trading. By setting the Fibonacci level, we see that the FLAG pattern coincides with 23.6%; if we see the break above, we can see first at 1.73500 and then 1.75000.
The four-hour time frame shows us the previous break above the falling line of resistance. We also see less consolidation from which further growth can continue towards higher levels above 1.72770. First, we need another break less trend line of resistance. We have support from the bottom at 1.71000, which coincides with the moving average of MA50 and MA100.
From the news and how political and economic statements, we can single out the following: The European Commission proposes emergency measures to prepare for Brexit’s outcome without an agreement. The EU proposes a set of targeted emergency measures in preparation for the Brexit scenario without an agreement. This refers to the period during which there is no agreement after the end of the December 31 deadline.
The measures will ensure basic reciprocal air and road connectivity and provide reciprocal access to fishing between the EU and the UK. Any statement on Brexit will affect European currency pairs.