Earlier today, RBA’s Glenn Stevens’ bullish speech  pushed AUD higher which helped lifted NZD as well during early Asian trade. This weighed on EUR/NZD which push price below 1.58 and even tested 1.575 support. However during European hours, positive news from Germany started to flood which pushed EUR higher.
German IFO Expectations and Current Assessments came in at 104.6 and 110.2 respectively, higher than estimates of 101.4 and 108.5. Previous month’s readings were also retrospectively revised higher. To cap it off, German domestic demand was found to be growing at 0.2% in Q4, despite the same period’s GDP falling which was led by a fall in exports. What this means is that Germany’s economic health may not be that bleak after all. Internally, the resilience of Germany still remain despite the lower outlook that has been observed in its Eurozone neighbors.
EUR/NZD rallied above the downward sloping trendline in fore since 20th Feb. Prices is also just peeking above 1.58, to trade in the center of the consolidation range found on Feb 16th to Feb 19th. Though this recovery is welcomed by bulls playing the 1.575 support line, doubts remain whether price will be able to break 1.585 to change the short-term bearish bias.
It is important to note that the rally on Feb 20th is due to RBNZ’s Wheeler surprise dovish turn, and since then price has been trading steadily lower, showcasing EUR inherent weakness if not NZD’s strength. Current short reprieve brought by German data may not have strong follow-through due to those numbers generally regarded as low impact. Certainly, ECB’s announcement of LTRO repayment scheme in 2 hours time (8am EST) may direct EUR more so than what the German news has done.
Daily Chart is relatively confusing, as price looks to be forming a rising channel with higher highs and higher lows. However, both Stochastic and Ichimoku are giving bearish bias with price breaking below Kumo and the formation of a bearish Kumo twist. Stochastic line has also just crossed Signal line, showing that an interim stoch peak might be in place. Though pure price action and indicators do not agree, should price break below the Feb 15 lows, we could see an acceleration of bearish momentum as the rising Channel will be invalidated, negating the counter-argument to what the indicators are telling us.
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