On December 30, a significant bearish rejection took place around the level of 0.6840 (daily resistance level) similar to what happened previously on October 23.
Moreover, a daily closure below 0.6750 allowed a quick bearish decline to occur initially towards the level of 0.6500, which was broken to the downside as well.
However, the price levels of 0.6400-0.6350 constituted a significant support zone. Hence, a strong bullish rejection was expressed on January 20 (inverted head and shoulders pattern).
Since January 26, bullish persistence above 0.6500 was mandatory to keep pushing the NZD/USD pair towards higher bullish targets. However, temporary bearish rejection has been expressed around 0.6550 for almost two weeks which led to the depicted consolidation range.
On January 28, the depicted support level of 0.6400 acted as a prominent key level offering a valid buy entry. A bullish breakout above 0.6550 has been executed earlier today.
Bullish persistence above 0.6550 (depicted recent support) is needed to keep the price moving towards higher bullish targets. The nearest bullish target is currently located around 0.6700.
On the other hand, another bearish closure below 0.6550 brings the NZD/USD pair inside the depicted consolidation range again (between 0.6400 and 0.6550).
The material has been provided by InstaForex Company - www.instaforex.com