EUR/NZD-Bullish Opportunity with Harmonic Pattern & RSI Div.This report provides a detailed technical analysis of the EUR/NZD currency pair, emphasizing a Bullish Butterfly Harmonic Pattern forming at a key support area. The analysis is supported by a Bullish RSI Divergence observed on the 4-hour chart, reinforcing our bullish bias.
Bullish Butterfly Harmonic Pattern:
The EUR/NZD is currently forming a Bullish Butterfly Harmonic Pattern, a reversal pattern signaling a potential bullish trend. This pattern is characterized by precise Fibonacci retracement and extension levels, indicating a potential upward price movement from the current support area.
Key Support Area:
The pattern is emerging at a significant support zone around 1.76671, which has historically provided strong buying interest. This level is crucial for our entry point, providing a favorable risk-to-reward ratio.
Indicator Analysis
RSI Divergence:
The Relative Strength Index (RSI) on the 4-hour chart shows a bullish divergence, where the price makes lower lows while the RSI makes higher lows. This divergence suggests a weakening bearish momentum and potential bullish reversal.
Trade Setup
Entry Point:
Entry: 1.76671
Stop Loss:
Stop Loss: 1.76242
Take Profit Targets:
TP-1: 1.77100
TP-2: 1.77529
TP-3: 1.77958
Risk Management:
Setting a stop loss at 1.76242 ensures minimal risk exposure if the market moves against our position. The take profit targets are strategically placed to capitalize on the anticipated bullish movement, with each target offering progressively higher potential returns.
Conclusion:
Based on the formation of the Bullish Butterfly Harmonic Pattern and the Bullish RSI Divergence on the 4-hour chart, EUR/NZD exhibits a strong bullish bias. Traders are advised to enter the market at 1.76671, with a stop loss at 1.76242. The take profit targets of 1.77100, 1.77529, and 1.77958 provide clear exit points to maximize profits.
By adhering to this trade setup and risk management strategy, traders can effectively navigate the EUR/NZD market, leveraging technical indicators and patterns to inform their trading decisions.
