Is the trend still our friend on these pairs?
Or are we about to see the bend at the end for either NZD/USD or EUR/GBP?
Check out these support zones that are being tested:
EUR/GBP 4-hour Forex Chart by TradingView
Let’s start off with this classic break-and-retest setup on EUR/GBP.
As you can see from the 4-hour chart above, the pair is retreating to the rising trend line that’s been holding since mid-December.
This happens to be right smack in line with the 61.8% Fib, a former resistance zone, the dynamic inflection points at the moving averages, and the .8850 minor psychological support.
Confluence, baby!
If the support area holds, EUR/GBP could make its way back up to the swing high close to the .9000 major psychological level.
Stochastic is favoring a continuation of the climb, as the oscillator is already starting to pull higher from the oversold region to reflect a return in bullish pressure.
Moving averages, on the other hand, aren’t so sure since the 100 SMA appears to be crossing below the 200 SMA.
NZD/USD 4-hour Forex Chart by TradingView
Now this one has been cruising inside a rising channel with its higher lows and higher highs over the past couple of months and is currently testing support.
Will we see a bounce or a break this time?
NZD/USD seems to be forming a bearish flag pattern, hinting that a breakdown is possible. If that happens, the pair could tumble by the same height as the mast, which spans roughly 200 pips.
On the flip side, if support holds, price could recover to the nearby resistance levels at the channel top near .6600 or at least until the middle around .6450.
Technical indicators appear to be pointing to a bounce, as the 100 SMA is still above the 200 SMA while Stochastic is on the move up.
Just take note that, the 100 SMA might be turning lower and that the oscillator seems to be having second thoughts about its climb!
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