The daily chart shows a bullish Flag pattern that was initiated around the level of 0.6230 on September 23.
On November 30, a bullish engulfing candlestick was expressed around 0.6520 where the depicted uptrend came to meet the NZD/USD pair.
Shortly after, a bullish breakout above 0.6600 (the upper limit of the flag pattern) took place. This enhanced the bullish side of the market towards 0.6800.
As anticipated, temporary bearish rejection existed around the price level of 0.6840 (daily resistance level) similar to what happened previously on December 16.
On the other hand, an estimated projection target for this flag pattern remains at 0.6950 when the NZD/USD pair manages to keep trading above 0.6840.
On the other hand, a daily closure below 0.6750 invalidates the depicted uptrend, allowing a quick bearish decline initially towards the price level of 0.6600.
Few weeks ago, an obvious bullish breakout above 0.6600 was executed via a full-body bullish candlestick on the H4 chart.
Shortly after, the NZD/CAD pair faced resistance between 0.6700 and 0.6750 providing temporary bearish rejection.
For the NZD/USD conservative traders, a valid buy entry was previously suggested around 0.6600 (corresponding to the depicted uptrend and the upper limit of the broken consolidation range).
Last week, lack of enough bullish pressure above 0.6800 was manifested. That is why, the current bearish decline is pushing even below the depicted support level at 0.6700.
A valid buy entry was suggested around the price zone of 0.6750-0.6700 where the depicted uptrend came to meet the NZD/USD pair. However, It should be closed as an evident bearish breakdown of the depicted uptrend line is currently taking place.
Hence, a quick bearish decline towards the prominent support level of 0.6600 should be expected where a new bullish swing may be anticipated.
The material has been provided by InstaForex Company - www.instaforex.com