The NZD rally this week as caused most NZD pairs light up this week, including the EURNZD which is the chart I am eyeballing going into next week.
We’ve seen a very very large drop in this market, where the intense selling as created a massive hole between the actual bid price and the mean value.
Generally when you get extreme gaps like this, it’s like pulling back on a bow and arrow, when it lets go – the return move is just as violent, as the market does not like to sit around at this extreme prices at all.
So the mean gap is going to encourage buying.
But we’ve also got another technical reason here for bullish price action to kick in, and that’s the weekly support level.
These weekly levels are where you normally see the market bounce, and since we’ve already seen the seller dump the price here – we can only assume that they are going to be some what exhausted.
Price will take the path of least resistance, and right now that looks like it is to the upside.
We’ve already seen the bulls starting to enter the market off the weekly support. Going into next week, I am expecting a much more aggressive bullish response.
sharon
also check out GBPNZD Daily..there is a beautful gap down and a hit on main supoort
Milutin
Would love to see it revert to bridge the gap on D1 and meet EMA21 🙂
Let’s wait and see
Steve Epperson
I really do need to keep the EMA on my charts. I believe without it, I am missing some opportunities. As usual Mr. Woods, excellent analysis. Many thanks.
Henry
Superb. I’m buying this pair.