On January 28, the depicted support at 0.6400 acted as a prominent key level offering a valid buy entry. The 0.6550 level was broken a few weeks ago.
Bullish persistence above 0.6550 (depicted recent support) was necessary to keep the price moving towards higher bullish targets.
During February's consolidations, the price zone of 0.6750-0.6840 constituted a significant resistance zone where signs of a bearish rejection were seen (triple-top reversal pattern).
However, on February 9, the NZD/USD pair failed to consolidate below the depicted support level at 0.6550.
In early March, temporary bullish breakouts above 0.6750 and 0.6860 were executed. That's why, these price levels stood as temporary support levels.
On May 6, daily candlestick closure below the 0.6850 level enhanced a quick bearish movement towards 0.6750 where bullish rejection was expected to be applied.
However, obvious bearish closure below 0.6750 was achieved on May 24 (bearish breakout of the depicted bullish channel).
Obvious bullish recovery was expressed around the price level of 0.6675. That's why, a recent bullish pullback is currently taking place above 0.6760.
Note that the current bullish breakout above 0.6760 invalidates the previous bearish scenario allowing a quick bullish movement to occur towards 0.6860.
On the other hand, the current price zone between 0.6760 - 0.6860 remains a significant resistance zone (corresponds to the backside of the broken channel as well).
Hence, a valid SELL entry can be offered around the current price levels. However for conservative traders, a bearish closure below 0.6760 is needed to ensure further bearish decline.
The material has been provided by InstaForex Company - www.instaforex.com