Bullish persistence above 0.6550 (depicted support) was necessary to keep the price moving towards higher bullish targets.
In February and March, signs of bearish rejection (triple-top reversal pattern) were expressed around the price level of 0.6750 until April when a bullish breakout above 0.6750 and 0.6860 was executed.
Later on May 6, daily candlestick closure below the 0.6850 level enhanced a quick bearish movement towards 0.6750 where bullish rejection was expected to be applied. However, obvious bearish closure below 0.6750 was achieved on May 24.
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 current bullish swing was initiated.
Recently, the price zone between 0.7470-0.7500 corresponded to the upper limit of the depicted movement channel where bearish rejection and a valid SELL entry were expressed by the end of last week.
S/L should be placed above 0.7550. T/P levels should be located at 0.7240, 0.7160 and 0.7060.
On the other hand, the price zone between 0.6960-0.6860 constitutes a significant support zone to be watched for a valid BUY entry if the current bearish swing extends below 0.7100.
The material has been provided by InstaForex Company – www.instaforex.com