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 0.6750 and 0.6840.
On the other hand, a daily closure below 0.6750 invalidated the depicted uptrend, allowing a quick bearish decline initially towards the price level of 0.6600 where significant bullish rejection should be expected.
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/USD 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 was seen above 0.6800. That is why, the current bearish decline is pushing the pair 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.
Shortly after, an evident bearish breakdown of the depicted uptrend line occurred. This invalidated the previous bullish scenario.
Hence, a quick bearish decline was expected towards the prominent support level of 0.6600 where a new bullish swing and a valid buy entry should be expected.
S/L should be set as daily closure below 0.6580.
The material has been provided by InstaForex Company - www.instaforex.com