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. A 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. Reconsolidation 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 which initiated bearish reversal. As expected, the price level of 0.7050 failed to offer enough bullish support to the NZD/USD pair. That is why, a further bearish decline was expected towards 0.6800 (Reversal pattern bearish target). Evident signs of bullish recovery was expressed around the recent low (0.6780). So, a bullish pullback is expected towards 0.7050. Moreover, further bullish advance should be expected towards 0.7150 if the current bullish momentum is maintained above the key level of 0.7050. On the other hand, the price zone of 0.7050-0.6980 has turned a newly established demand zone to be watched for buy entries if any bearish pullback occurs.
Trading Recommendations
An inverted Head and Shoulders pattern was established on the chart indicating high probability of bullish momentum. That is why, the price zone of 0.6800-0.6830 was considered for a short term buy entry. Bullish persistence above 0.7150 is mandatory to pursue towards next bullish targets.
S/L should be moved to 0.7100 to secure some profits. T/P level remains projected towards 0.7150 and 0.7240.
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