EUR/NZD Uptrend to Continue in Near Future

Euro CurrencyIn our currency report dated February 2, 2018, we have speculated in the decline of the EUR/NZD currency pair from 1.7050 levels. Also, we recommended traders regarding opening a short position in spot FX market.

Apart from that, we also expressed our interests in investing a put option. As we had speculated, the EUR/NZD pair declined to 1.6630 levels last week. All our traders and other readers registered profit due to this downtrend.

In the past two trading sessions, the currency pair has bounced back to 1.6890 levels. We are hopeful that EUR/NZD pair would rise in the near future and the reason for the same is discussed below.

The European Officials have become more optimistic towards Eurozone economy. According to Benoit Coeure who is the ECB (European Central Bank) officer said that recovery in the Eurozone is the strongest in the past 2 decades. He further said that Euro Zone would record its fastest growth rate in 10 years if the GDP growth outlook of 2.2 percent is achieved in 2017. The previous estimates have curtailed the growth at 1.7 percent.

Kit Juckes who is an analyst at Societe Generale has expressed similar bullish views of Euro Dollar. He has underscored the current account surplus of Eurozone so as to back his arguments. Imports would have to buy goods in Euro-Dollar as goods are priced in Euro and this, in turn, would make the currency strong.

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Another argument given by the analyst at Societe Generale in favour of Euro supports Principle of Purchasing Power Parity or PPP. One can calculate the value of a currency based on PPP by taking a basket of goods in one nation and comparing its value in another currency. It shows that the Euro is undervalued and the rally in this currency is likely in near future.

Grant Robertson, the Finance Minister of New Zealand said that the mandate of Reserve Bank of New Zealand (RBNZ) will be changed to include the unemployment rate. Also, the government is looking forward to curtailing the powers of Governor of Central Bank for better policy decisions. The New Zealand government wants to set up policy committee for making decisions regarding interest rates.

Also, the Finance Minister wants to publish the minutes of the policy meeting. The New Zealand Dollar has turned bullish after the inclusion of unemployment rate in the mandate of RBNZ. It is so because the market thinks that it would disable the abilities of the central bank of New Zealand to raise the interest rates in line with the central banks of other countries across the world. Hence, we expect a rally in EUR/NZD in the near future.

EURNZD Pair Nov 16th 2017

EURNZD Pair Nov 16th, 2017

The historic price chart is showing a strong support for the currency pair at 1.6790. Also, the RSI indicator is moving in a bullish zone. The currency cross is also above 50-period moving average. Hence, the uptrend in the currency pair is likely.

In order to gain from the uptrend, traders should establish a long position in this currency pair. The LONG position should be opened around 1.7080 and stop order should be placed below 1.6970.

One should EXIT the trade when the pair reaches 1.7340 level. To maximize returns, traders should BUYy a CALL Option. For the trade, strike price around 1.7080 is preferred and trade expiry period should be around November 23, 2017.

Rich Archer

Rich Archer

Hi, my name is Rich Archer. I am living in London. Welcome to Binary Manual. Reach to Binary Options broker reviews and market news here.


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