Trade of the day

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Sell EURNZD 1.7505 Stop 175.65 Target 172.75 (RISK 0.50%)

EUR: Very weak Eurozone PMI data. Eurozone manufacturing sentiment fell in September to the worst level in nearly seven years. The flash Eurozone manufacturing PMI fell to an 83-month low of 45.6 in September, down from 47.0 in August. German manufacturing PMI fell to 41.4 in September from 43.5, the worst reading in more than a decade. The flash Eurozone services PMI fell to an 8 month low of 52.0 from 53.5 in August, which was below the 53.2 reading expected.

NZD: The New Zealand Dollar is trying to hold onto positive news relating to US-China trade, while on Monday, we heard that President Trump had discussed expanding trade and defence cooperation with New Zealand, in a conversation with PM Ardern. We’ve also seen some profit taking on Kiwi shorts ahead of Wednesday’s anticipated RBNZ decision.

From a technical and trading perspective the EURNZD posted a key day reversal yesterday and a potential double top at the 1.76 level, note the momentum divergence on the daily chart which suggests that we may be entering a phase of consolidation/correction, overnight the EURNZD has printed fresh lows as such I am going to enter short positions on a pullback to test offers at the 1.75 level targeting a move to test bids below 1.73 as per the chart below

Please note that this material is provided for informational purposes only and should not be considered as investment advice. The views discussed in the above article are those of our analysts and are not shared by Tickmill. Trading in the financial markets is very risky.

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