EUR/NZD – Potential for trend continuation after rebound from support

Fundamental analysis:
– The interest rate differential (adjusted for inflation) is in favor of the Euro (0.2 for EUR versus -0.5 for NZD).
– By -earlier this week the RBNZ left interest rates unchanged, reducing market expectations for continued rate hikes but hinting at higher rates for longer, although inflation showed progress, falling 0.7% to 6%.< br>– At the same time, PMI releases from Italy, Germany and France this week showed an increase in activity in the manufacturing sector, which should support the euro, increasing the likelihood of maintaining ECB hawkish policies for longer.

Technical Analysis:

1) Long trend, with signs of an exhausted corrective impulse.
2) DeMarket Oscillator holds after breaking the oversold limit, but with potential for exit and consolidation of the reverse.
3) Sequential prints up 2, implying to potentially generate a Bullish impulse.
4) Price found support from the support line of the long trend channel, just above 200MA, then headed for a retest of the 23.6FIBO breakout
5) Currently, price is retreating after two-day test of quotes just below 23.6FIBO – correction of correction prerequisite for good levels to enter the trend.

Short-term bank expectations:

Weekly bank expectations for the EUR/NZD cross have a low of 1.7463 (just below the current Low of 29.09) and a high of 1.7873 (just above the 23.6FIBO)
-Currently trading at the top of the expected weekly range, hinting for improved attitudes among traders

Long-term expectations of the banks:

The distribution of bank expectations for Q4 for the cross shows an average fair price for the quarter at 1.75, which is slightly below the current low around 200MA.
-Upper limit of consensus Q4 forecast – 1.87 and lower limit 1.63 – which implies a wide trading range
-Long-Term levels around 200 MA will be key in determining the trend. As of now, it has still “healthily” corrected, giving more weight to bullish expectations.

Conclusion:
With a successful retest of the previous Low at 1.763 and the formation of a price section for a new bull impulse, we are watching for entry opportunities around the 1.763 levels with SL zone below 1.746 with target levels 1, 80 / 1,825.

Alternative scenario:
When the previous low is broken, the price can reach 200MA and 38.2FIBO, therefore the SL zone is moved below these levels.