EURNZD: As rates increase, the currency grows

New Zealand national bank increased rates from 0.25 to 0.50 points. It doesn't take a genius to imagine how that impacts the price of the EURNZD pair. With higher interest rates, it is more beneficial for the banks to hold NZD. Plus this pair was in a downtrend before that.

The most recent lows are broken (dashed green). A somewhat recent low meets a 2019 swing low of around 1.63 - this could be a temporary stop for the price (green, transparent green).

A descending channel could be drawn here stretching from this June 2021 till Now. If I project its biggest breakout under the channel's angle, I will get the same support around 1.63

If the market believes that European Central Bank may increase the rates as well, the price should make another short-term bottom there. If it does, one of the broken supports will be tested, perhaps it will even reach the middle of the channel.

Is it likely though? Indebted Italy and Greece would be in trouble if the rates on their debts increased further.

I don't know about future fundamentals, but I think some long entries will be found in the area - especially on lower timeframes and I plan to join!