The EURNZD pair has moved lower from the 1.7900 area, with acceleration in selling yesterday after the CPI data for New Zealand came in at 0.9% versus an expected 0.7% from 0.4% previously. Price reached a low of 1.7561 but has retraced higher to 1.7640 currently. A continued retracement may lead to a retest of 1.7700. Above this level the 1.7800 has been a minor obstacle for price last month, with resistance above at 1.7830. Earlier this month price managed to breakout beyond 1.7900 to find resistance at 1.7928. A move to 1.8000 would need to clear these levels at a minimum.
Sellers may be exhausted after the move yesterday and allow price to retrace somewhat as they take profit. A move back under 1.7600 and yesterday’s low at 1.7561 may suggest a test of 1.7500 is on the cards. The 50 DMA seems to be having little or no influence on price at present but a loss of 1.7489 may push price lower to the 100 DMA at 1.7400. This would seriously jeopardise the summer rally in the pair and may test support at 1.7330. The 200 DMA might interest buyers at 1.7175, with traders leaning on 1.7118 or 1.7100. However a loss of this support puts 1.7000 in the crosshairs followed by 1.6600.
The GBPCAD chart has been trending lower in 2018 and having found support at 1.6600 is attempting to bounce higher and break its trend line resistance at 1.7287. Support for the pair can be seen at 1.7032 ahead of 1.7000. A loss of this area may suggest a drop to the 50 DMA might occur, with the indicator positioned at 1.6936. This level is closely supported by the 1.6866 support area. Below this point, the 1.6800 level may influence price on a pullback, with the next support below being the 1.6600 area itself. The low of this zone is 1.6563 from early August.
The pair has been impacted by Brexit headlines, NAFTA trade developments and Oil prices. With Brexit discussions heating up at present this news story is potentially taking centre stage. A break higher on positive news would need to clear 1.7200 in order to engage the resistance trend line. Above this line the 200 DMA might present a point of resistance at 1.7382. The 1.7500 level will be key to any breakout and the beginning of its zone of influence may be associated with the 1.7480/1.7475 levels. A confirmed move beyond these levels, potentially points to a retest of the lower high at 1.7775.