On December 16, the price level of 0.6960 failed to apply enough bullish pressure. Instead, bearish movement continued toward the lower limit of the depicted BUY zone (0.6860) which provided significant bullish rejection on December 23.
The NZD/USD pair was trapped within the depicted price range (0.6860-0.6990) until a bullish breakout occurred.
A bullish breakout above 0.6960-0.7000 allowed the pair to head toward the price level of 0.7100 (Key level) which failed to provide sufficient bearish pressure on the pair.
Bullish persistence above 0.7100 allowed further bullish advance toward 0.7250-0.7350 (Sell-Zone) where the bearish price action should be expected.
Bearish persistence below 0.7250 is needed to allow further bearish decline toward 0.7100 (note the previous bearish DAILY candlesticks expressed within the SELL-Zone).
Bearish persistence below 0.7100 (Key-Level) will allow further bearish movement toward 0.6960.
That is why daily candlestick closure below 0.7100 is needed to support this bearish scenario.
Otherwise, the NZD/USD pair will remain trapped within the depicted consolidation range (0.7100-0.7250).
The material has been provided by InstaForex Company - www.instaforex.com