EURNZD after a strong upward movement was not able to establish new maximum. This behavior of price indicates exhaustion among sellers, and technically means creating the right arm of head and shoulders formation.
As you can see on the following 4-hour chart, the diagonal neck line of the formation was broken, but the price did not begin to slide further. The price now consolidates between the neckline and the key horizontal support area at 1.6790.
It is therefore important to wait for a potential break down, which may be a selling opportunity. The closing under the support at 1.6790 /70, which also converge with the 50% Fibonacci correction from the second half of October, will confirm the breakout.
The key target for the short position may be the range of H&S formation and will roughly can be around 400 pips, which will pull us to support around 1.6385.