- EURNZD Weekly Outlook June 26-30
While the Euro-area is yet to find a balance between growing economy and low inflation rate. Investors are clamouring for a clear exit strategy from its ongoing stimulus program and an interest rate hike.
However, the difference in market expectation and European Central Bank position has weakened business confidence in the region and plunged the Euro single currency to a 5-week low against the New Zealand dollar.
Also, while the New Zealand economy expanded (0.5%) less than projected in the first quarter, the weak Japanese Yen, uncertainty in the U.S., Europe and China continued to bolster the Kiwi dollar outlook as seen in the past 5 weeks.
Technically, a break below the ascending channel as shown above affirmed bearish continuation, especially when taken into consideration last week closing price below 20-day moving average and 2 weeks’ ago candlestick that closed as a bearish pinball.
Therefore, this week I will expect the current downward trend to continue and increase as more investors jump on EURNZD to avert risks ahead of Central Banks’ report due this week. Hence, I will be looking to add to my sell order for 1.5118 targets. However, a positive ECB economic report would nullify this projection.
Please note that the Bank of England, European Central Bank, Bank of Canada and the Federal Reserve reports are due this week.