EURNZD – BUY Stop – 1st September 2020

EURNZD – BUY Stop – 1st September 2020 (Closed)

Good morning team,

New month, hopefully we kick start with a win here.

Fundamental Update

This set up is focusing on the EURNZD, from a technical and fundamental perspective the trade ticks the necessary boxes.

EURO bullish bets has reached record highs from spectators as the ECB covid-19 recovery fund continues to fuel the EURO rally. The EURO could be the new safety play taking over from the USD leading into the general elections in a couple of months. We may see the EURO continue to benefit from the ongoing weakness in the USD. We do know that shifts in sentiment will change at some point. The EURO long trade is getting very crowded, however due to economic data improving in Europe, there is potentially further upside still.

Taking a look at NZ, the RBNZ has increased the size of their overdraft and suggested negative rates could happen at some point in the future. Corona-virus lock-downs across the country has negatively impacted the economy. Fundamentally there is a divergence in economic conditions and potential future interest rates between the Euro and NZD.

Technical Analysis

1 Hour Charts

There has been a tag of a trend line support followed by a negative trend line breakout to the upside on the 1 hour time frame.

Trade Setup: BUY Market execution, current price 1.7727, stop loss 1.7655 and take profit target 1.7827-1.7865.

Stop loss: 72 pips

Take profit: 100-138 pips

Please manage risk by moving stop losses to open price once a profit of 30+ pips occurs.

Trade Setup
BUY - Market Execution

Entry
1.7727

Take Profit
1.7827 - 1.7865

Stop Loss
1.7655