On May 30, obvious bullish rejection was expressed around the price level of 0.6675 (lower limit of the depicted channel). That is why the recent bullish breakout is taking place above 0.6860.
As long as the NZD/USD pair kept trading above 0.6860, further bullish advance was expected towards the upper limit of the depicted channel around 0.7400.
On July 12, the price zone of 0.7350 - 0.7400 (upper limit of the depicted channel) enhanced a quick bearish decline towards the price levels of 0.6960 where the recent bullish swing was initiated.
Recently, the price zone between 0.7470-0.7500 has corresponded to the upper limit of the depicted movement channel where bearish rejection and a valid SELL entry were expressed few weeks ago.
On October 20, the mark of 0.7245 was a prominent Key-Level to determine the next destination for the NZD/USD pair.
As Expected, Evident bearish rejection around 0.7250 offered a valid SELL signal (already running in profits). Initial T/P levels should be located at 0.7070 and 0.6970.
Please take into consideration that the price level around 0.7100 (Lower limit of the depicted channel) constitutes a short-term Support Level. Hence, temporary bullish recovery may be expressed before further bearish decline can occurs.
On the other hand, note that the price zone between 0.6960-0.6860 constitutes a significant support zone to be watched for a valid BUY entry if bearish pullback manage to extend below 0.7100.
The material has been provided by InstaForex Company - www.instaforex.com