EURNZD remains in a range-bound as the price awaits the NZD rate statement, which will be released on Wednesday.
EURNZD crashed from the historic resistance level at 1.7000, which has been rejecting price since May. The recent crash on EURNZD occurred as NZD picked up a short-term strength ahead of the rate statement for the third quarter. But the price has found support at 1.66500, which also provided price support back in May. The support level has pushed the price back to the 1.67000 area, where the price is currently going sideways.
A break to the upside above 1.68000 before the news release will see the price rally back to the historic resistance level at 1.7000, but a break below 1.67000 before the news release will see the price crash to March low or beyond.
RBNZ (Reserve Bank of New Zealand) has kept the rate unchanged since May 2020. But the forecast is 0.5% this time around, which is higher than the usual 0.25% that it has been since last year.
According to the Commitment of Traders report that was published on Friday, over 1,000 short contracts were added on NZD by the non-commercials. This has increased the overall contracts on short.
NOTE: It is advisable to be careful while trading news; volatility always increases, and spreads are always wide at this time. You might either take a position before the news release or after the news release.