The daily chart shows a bullish Flag pattern that was initiated around the level of 0.6230 on September 23.
On November 30, a bullish engulfing candlestick was expressed around 0.6520 where the depicted uptrend came to meet the NZD/USD pair.
Shortly after, a bullish breakout above 0.6600 (the upper limit of the flag pattern) took place. This enhanced the bullish side of the market towards 0.6800.
As anticipated, temporary bearish rejection existed around the price level of 0.6840 (daily resistance level) similar to what happened previously on December 16.
On the other hand, an estimated projection target for this flag pattern remains at 0.6950 when the NZD/USD pair manages to keep trading above 0.6750 and 0.6840.
On the other hand, a daily closure below 0.6750 invalidated the depicted uptrend, allowing a quick bearish decline initially towards the price level of 0.6600 which was broken-down as well.
Price level of 0.6500 remains a significant Support level for the pair where a new bullish swing towards 0.6600 and 0.6700 may be initiated.
Two weeks ago, lack of enough bullish pressure was seen above 0.6800. That is why, the current bearish decline is pushing the pair even below the depicted support levels at 0.6700 and 0.6600.
However, an evident bearish breakdown of the depicted uptrend line occurred shortly after. This invalidated the previous bullish scenario allowing a quick bearish decline to occur towards the prominent support level of 0.6600.
Bearish decline went further below 0.6600 extending towards 0.6500 which corresponds to the lower limit of a previous consolidation range. Early signs of bullish recovery are manifested on the chart today.
Bullish fixation above 0.6600 is needed to pursue towards higher bullish targets at 0.6700 and 0.6750 where price action should be watched carefully.
The material has been provided by InstaForex Company - www.instaforex.com