EURNZD has been trending lower, moving inside a descending channel on its 4-hour time frame.

Price is currently testing the channel resistance and might be due for a bounce or a break. 

The 100 SMA is above the longer-term 200 SMA, suggesting that the path of least resistance might be to the upside. However, these moving averages are currently holding as near-term resistance and might allow price to head back to the channel support at 1.5200. 

Stochastic is indicating overbought conditions, which also suggests that a selloff might take place. The oscillator has yet to turn lower and move down from the overbought area before showing that sellers are taking control of price action. 

There are no major reports lined up from the euro zone today as most banks are closed for the holiday. As for New Zealand, the Global Dairy Trade auction and release of the quarterly PPI and jobs figures are lined up for Wednesday’s Asian trading session. 

Analysts are expecting to see much weaker jobs growth for New Zealand in Q2, but the unemployment rate is expected to fall from 5.7% to 5.3% for the period. Producer prices could post another round of declines, fueling speculations of another interest rate cut from the RBNZ soon. 

On Thursday, the ECB will release the minutes of its latest policy meeting and probably include some clues on their next easing plans. Final CPI readings are also due from the region then and downgrades could spur expectations of additional stimulus in the next ECB meeting. 

By Kate Curtis from Trader’s Way