Source: Forex Analysis
In July 2017, an atypical Head and Shoulders pattern was expressed on the depicted chart which indicated upcoming bearish reversal.
As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That’s why, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).
Evident signs of bullish recovery was expressed around the depicted low (0.6780). An inverted Head and Shoulders pattern was expressed around these price levels.
The price zone of 0.7140-0.7250 (prominent Supply-Zone) failed to pause the ongoing bullish momentum. Instead, a bullish breakout above 0.7250 was expressed on January 11.
That’s why, a quick bullish movement was expected towards the depicted supply zone (0.7320-0.7390) where evident bearish rejection and a valid SELL entry were expected.
On February 2, a bearish engulfing daily candlestick was expressed off the price level of 0.7390.
Moreover, a double-top reversal pattern followed by another lower High were expressed around the price zone (0.7320-0.7390) where a valid SELL entry was offered as expected.
It’s running in profits now. S/L should be lowered to 0.7270 to secure some profits.
On the other hand, bearish breakdown of 0.7300 (neckline) is needed to confirm the depicted reversal pattern. A downward target would be located around 0.7050 and 0.7000.
The material has been provided by InstaForex Company – www.instaforex.com