Few months ago, the NZD/USD pair established a consolidation zone that extended between the price levels of 1.7620 and 1.7870.
On January 20, bears managed to execute a successful breakout below the major DEMAND level at 1.7620.
Recently, the NZD/USD pair managed to break above 0.7430. This price level is expected to provide significant SUPPORT for the pair at retesting.
The H4 chart showed an inverted Head and Shoulders pattern that originated off the price level of 0.7200 (the most recent low). Bullish fixation above the neck-line confirmed the reversal pattern earlier this week.
Estimated bullish projection target for the reversal pattern is located around the price level of 0.7676.
On the other hand, the price level of 0.7630 corresponds to the 61.8% Fibonacci Level as well as the lower limit of the broken consolidation zone depicted on the chart. Hence, price zone of 0.7630-0.7670 should be watched for price action as low-risk SELL entries can be taken at retesting. Stop Loss should be placed above 0.7700.
The material has been provided by InstaForex Company – www.instaforex.com