Daily Outlook
The NZD/USD pair has been trending up within the depicted bullish channel since January 2016.
In November 2016, early signs of bullish weakness were expressed on the chart when the pair failed to record a new high above 0.7400.
A bearish breakout of the lower limit of the channel took place in December 2016.
In February 2017, the depicted short-term downtrend was initiated in the depicted supply zone (0.7310-0.7380).
However, a recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.
The price zone of 0.7150-0.7230 (SUPPLY ZONE in confluence with 61.8% Fibonacci level) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.
This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 where evident bearish rejection and a valid SELL opportunity can be offered if enough bearish rejection is expressed.
Currently, the NZD/USD pair remains trapped between the price levels of 0.7230 - 0.7310 until a breakout occurs in either direction.
Trade recommendations:
Risky traders can have a valid SELL entry at retesting of the price level of 0.7310. S/L should be placed above 0.7400.
Conservative traders can wait for a bearish closure below 0.7230 then 0.7150 (61.8% Fibo level) for a valid SELL position.
S/L should be placed above 0.7250 while T/P levels should be placed at 0.7050, 0.6970, and 0.6850.
The material has been provided by InstaForex Company - www.instaforex.com