The EUR/NZD pair is one that most of you probably don't pay too much attention to, and that is truly unfortunate. After all, it has a decent spread, and it involves two major currencies. However, it is also a very technical currency pair as you can see by the attached chart.
When you look at the candle for the Friday session, you cannot help but notice that the market tried to rally, but gave up most of its gains. This is a reflection of the Euro in general, and concerns out of places like Cyprus. However, after hours we saw all the Cypriot Parliament passed several laws that will make it possible to accept the EU bailout package. With that being said, we have not seen a reaction to the news yet, as it came after the Forex markets were closed.
However, the dynamic could be a little bit different in this marketplace as the Kiwi dollar is definitely a "risk on" currency. Also, it should be noted that the Kiwi dollar did show a bit of strength towards the end of the week, so I believe that we could see any positive reaction in the Euro turned away in this pair. Also, you can see that there is clearly an area just below current levels that is massive support, and it back gets broken to the downside, we could see a significant move lower.
1.54
I believe that the 1.54 level will offer significant support, but if he gets broken to the downside we could be off to the races. After all, both the Kiwi dollar in the Australian dollar have seen a resurgence over the last couple of sessions, and any good feelings out of the marketplace due to the situation in Cyprus should benefit both of those currencies. That being said, it would make perfect sense for this pair to continue lower.
Also, there is the possibility that the markets turnaround and focus on the Italian situation right away. While that isn't necessarily a "risk on" event, it is most certainly an anti-Euro event, which of course should send this pair down lower.
