Source: Forex Analysis
The NZD/USD pair has been trending up within the depicted bullish channel since January 2016.
In November 2016, early signs of bullish weakness were expressed on the chart when the pair market failed to record a new high above 0.7400.
Bearish breakdown of the lower limit of the channel took place in December 2016.
In February 2017, the depicted short-term downtrend was initiated off depicted Supply zone (0.7310-0.7380).
However, a recent bullish breakout above the depicted downtrend took place on May 22. Since then, the market has been bullish as depicted on the chart.
The temporary bearish rejection was expressed around 0.7050 (previous daily-tops) before further bullish advance was pursued towards 0.7120.
The price zone of 0.7150-0.7220 stands as a prominent supply zone in confluence with Fibonacci level 61.8%. That’s why a bearish rejection should be anticipated.
On the other hand, daily candlestick closure above 0.7230 (Upper Limit of the current SELL-Zone) opens the way for bullish advance towards the next supply zone around 0.7310-0.7380.
A valid SELL-Entry can be considered at the current SELL-Entry zone (0.7150 up to 0.7220) especially when signs of bearish rejection is expressed.
Conservative traders can wait for bearish closure below 0.7150 (61.8% Fibo level) to confirm thementioned SELL signal.
S/L should be placed above 0.7250 while T/P levels should be placed at 0.7050, 0.6970, and 0.6850.
The material has been provided by InstaForex Company – www.instaforex.com