EURNZD continues to trend higher but seems to be hitting a roadblock at the 1.7840 area. This could lead to a correction to the nearby rising trend line that’s been holding since mid-July.

Applying the Fibonacci retracement tool on the latest swing low and high shows that the 50% level lines up with the rising support near the 1.7530 mark. The 38.2% Fib could also be enough to keep losses at bay since it coincides with the 1.7600 major psychological support. This also lines up with the 100 SMA dynamic inflection point, adding to its strength as a floor.

On the subject of moving averages, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. A larger correction could last until the 61.8% Fib, which might be the line in the sand for a pullback, and this lines up with the 200 SMA dynamic inflection point.

RSI is still pointing down, indicating that sellers have the upper hand while buyers take a break. Stochastic also seems ready to head south even as it had been previously heading north.

The US just imposed a fresh set of tariffs on $200 billion worth of Chinese goods, with the rate to go up from 10% to 25% by the end of the year. Trump has also threatened to target another batch worth $267 billion if China retaliates with countermeasures, which they likely will.

All these could take a huge toll on riskier assets and commodity currencies, particularly the Kiwi which has been sliding since the first set of tariffs were imposed back in July. On the flip side, the euro could enjoy some of the safe-haven flows as traders might not be too keen on putting money on the US dollar either.