On January 28, the depicted support at 0.6400 acted as a prominent key level offering a valid buy entry. A bullish breakout above 0.6550 was executed a few weeks ago.
Bullish persistence above 0.6550 (depicted recent support) was needed to keep the price moving towards higher bullish targets.
The price zone of 0.6750-0.6840 constituted a significant resistance zone where recent signs of a bearish rejection were seen during the previous few weeks (triple-top reversal pattern).
On February 9, the NZD/USD pair failed to consolidate below the depicted support level of 0.6550.
Moreover, an obvious bullish recovery was expressed around the depicted temporary support level. Hence, the recent bullish swing towards 0.6750 was initiated.
Note that bullish persistence above 0.6750 (upper limit of the consolidation range) was mandatory to allow further bullish advancement towards 0.6880.
However, an obvious bearish rejection was expressed around 0.6750 resulting in Wednesday's shooting-star daily candlestick depicted on the chart.
The NZD/USD pair will remain trapped within the depicted consolidation range (0.6560-0.6750) until a breakout occurs in either direction.
Hence, a quick bearish decline should be expected towards the depicted temporary support level of 0.6550 where the price action should be watched for a possible buy entry.
The material has been provided by InstaForex Company - www.instaforex.com