EURNZD has formed higher lows and higher highs on its daily time frame, creating an ascending channel. Price is currently testing support and could be due for a move to the top next.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. However, the gap between the indicators is narrowing to indicate weakening bullish momentum and a possible bullish crossover.

RSI is turning higher to confirm a return in bullish momentum that might at least take price up to the mid-channel area of interest. Stochastic also reached the oversold region and is turning up to indicate that bullish momentum might pick up enough to take it to the channel top around 1.7700.

The Kiwi is under some downside pressure on account trade jitters leading up to the next round of tariffs from the US on December 15. If they push through with this batch, tensions could escalate and derail negotiations, possibly even leading to even more retaliatory measures.

In that case, risk appetite could take a huge hit and lead to more declines for commodity currencies. It could also mean some downside for the US dollar, which might then leave other safe-havens like the euro in demand.

So far, economic data from the euro zone has been somewhat upbeat, lowering the prospect of additional ECB easing anytime soon. Besides, ECB head Lagarde has mentioned that her priority is to unite the divided central bank in order to pursue better policy decisions.

Other risk factors include the UK elections which might bring more downside to the shared currency if results signal further political uncertainty in the region. For now, polls are confirming that Tories could reach a majority in parliament.