EUR/NZD 4H Chart: Descending Triangle

EUR/NZD 4H Chart: Descending Triangle

• The common European currency is trading against the New Zealand Dollar in a descending triangle that is about to be broken.
  
• The pattern started to form after a 1.84% appreciation of the Euro amid Mario Draghi speech.
  
  
• From technical perspective, triangles are continuation pattern, which in this case mean that the rate has to make a breakout to the top.
  
• This scenario is additionally supported by the fact that the lower support line is also protected by a combination of the monthly PP at 1.5586 and the 200-period SMA at 1.5580.
  
  
• On the other hand, descending triangles, in particular, usually drive the currency pairs to the south.
  
• The validity of this outcome is supported by the fact that the road upstairs is blocked by a combination of the 55- and 100-period SMAs and the weekly PP at 1.5689.