Daily Outlook
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.
This resulted in a quick bullish advance towards next price zones around 0.7150-0.7230 (Key-Zone) and 0.7310-0.7380 which was temporarily breached to the upside.
The recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.
Re-consolidation below the price level of 0.7300 enhanced the bearish side of the market. This brought the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) which failed to pause the ongoing bearish momentum.
An atypical Head and Shoulders pattern was expressed on the depicted chart indicating a high probability of bearish reversal as long as bearish persistence below the neckline 0.7150 is maintained.
As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why the further bearish decline should be expected towards 0.6800 (Reversal pattern bearish target).
On the other hand, if the recent low (0.6817) remains defended by the bulls, a bullish pullback and a short-term BUY entry can be expected during this week's consolidations.
The next DEMAND level to meet the pair is located around 0.6710 that may be visited if enough bearish pressure is applied below 0.6800.
The material has been provided by InstaForex Company - www.instaforex.com