Chart: EUR/NZD Breakout and Long-term Pullback

This currency pair recently broke out of the daily consolidating triangle pattern, suggesting the beginning of a long-term trend.

Is the rally fading or just a retest?

Take a look at these turning points on the long-term chart!

TradingView EUR/NZD daily forex chart

After consolidating in a descending triangle formation for almost a year already, EUR/NZD broke through resistance last month to suggest that it could be in a long-term uptrend.

However, the pair hit another major hurdle around 1.8640, forcing Euro bulls to retreat from their charge.

Is this just a pullback from the ongoing uptrend or are we seeing the beginning of a reversal?

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on the Euro and New Zealand Dollar yet, then it’s time to check the economic calendar and keep up with the daily fundamental news!

The 100 SMA is above the 200 SMA, suggesting that buyers have the upper hand and support levels are more likely to hold than break. The price is already testing the 50% Fibonacci retracement level near the major psychological level of 1.8000, but could see a further correction of the 61.8% Fib closer to the former triangle top.

If any of these Fibs hold losses, the pair could set its sights back on the August highs near R1 (1.8570) and beyond.

A move back inside the triangle, on the other hand, could take EUR/NZD lower to the next support area at S1 (1.7700) or even back to the triangle support at the major psychological level of 1.7500.

Regardless of how you decide to play this setup, be sure to practice proper risk management and keep an eye out for major market catalysts to come!