EURNZD has been trading inside a range, finding support at the 1.7130 area and resistance near the 1.7450 minor psychological mark. The top of the range is currently being tested, and technical indicators are pointing to another move down.

The 100 SMA is above the 200 SMA for now, reflecting the presence of bullish pressure, but the gap between the moving averages has narrowed enough to hint at a possible bearish crossover.

If that materializes, EURNZD could retreat back down to the range support or mid-range area of interest around 1.7300.

Meanwhile stochastic is already pointing lower after reaching the overbought region, indicating a return in bearish momentum. A bit of a divergence can be seen, as the oscillator made lower highs while price had higher highs.

RSI also looks ready to move down without reaching the overbought area, suggesting that sellers are eager to take over.

Still, a break above the range resistance might be followed by a rally of the same height as the chart pattern.

There are no major economic catalysts lined up from both the eurozone and New Zealand this week, so any big moves might be a result of headlines affecting overall risk sentiment.

In particular, traders are paying close attention to rising European bond yields as a sign of market panic in the region. If that’s the case, the shared currency might be poised to lose ground to the Kiwi, which has enjoyed strong fundamentals over the past months.

The only downside for the commodity currency, however, is the risk-off market environment that’s dragging down higher-yielding assets. Investors remain increasingly worried about a global recession, which would mean weaker demand for commodities such as dairy from New Zealand.

Apart from that, resurfacing geopolitical tensions in Russia are also weighing on investors’ appetite for risk.