The NZD/USD pair had been trapped between the price levels of 0.7170 and 0.7350 until bearish breakdown of 0.7200 occurred on April 23.
Breakdown of 0.7220-0.7170 (neckline zone) was needed to confirm the depicted reversal pattern. Bearish target levels around 0.7050 and 0.7000 have been achieved already.
The price level of 0.7050 was considered a key-level for the NZD/USD bears That’s why, bearish persistence below 0.7050 allowed further bearish decline to occur towards the price levels around 0.6800.
As anticipated, the recent bullish pullback towards the price level of 0.7050 (Broken Demand-Level) offered a good opportunity for a valid SELL entry.
Quick bearish decline took place towards 0.6800 where a false bearish breakdown occurred. This allowed temporary bearish movement to occur towards 0.6680. However, the pair failed to maintain enough bearish momentum.
On July 7, significant bullish rejection pushed the NZD/USD pair above 0.6820 again. This enhances the bullish side of the market.
Currently, the price zone 0.6750-0.6800 constitutes a prominent demand zone to be watched for BUY entries with potential bullish targets around 0.6900-0.6980.
Please be cautious if any breakdown below 0.6680 occurs as this invalidates the previous bullish scenario.
The material has been provided by InstaForex Company – www.instaforex.com