EURNZD is trending higher on its 4-hour time frame as it formed higher lows and higher highs to create an ascending channel. Price is pulling back after hitting the resistance and is now down to the 50% retracement level.

This is below the mid-channel area of interest, indicating that there is some bearish pressure left to spur a larger correction. The 61.8% Fib lines up with the channel bottom around the 1.7065 mark and might be the line in the sand for an uptrend pullback.

The 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the climb is more likely to gain traction than to reverse. The gap between the indicators is widening again to show that bullish pressure is still in play.

RSI has some room to head south before reaching the oversold region, but the oscillator is also starting to turn back up to show that buyers are eager to return. Stochastic is also turning up after dipping into the oversold territory, suggesting that buyers might be back in the game. If so, price could bounce back to the swing high around 1.7300 or the channel top closer to 1.7400.

New Zealand printed its Q1 GDP reading and the results came in line with expectations of 0.6% growth, same as in the previous quarter. This eased expectations of another rate cut from the RBNZ soon, especially since the central bank just cut rates recently.

Meanwhile, the euro is facing some downside pressure ahead of the flash PMI releases later in the week since these leading indicators could be potent clues for economic health and therefore the ECB’s policy stance. Analysts are expecting to see improvements, particularly in the services sectors, so upbeat results could still spur some gains for the shared currency.