NZD/USD Intraday technical levels and trading recommendations for January 3, 2018


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 the 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.

The atypical Head and Shoulders pattern appeared on the depicted chart initiating a bearish reversal.

As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).

Evident signs of a bullish recovery was expressed around the recent low (0.6780). That's why, 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 to be a newly-established demand zone to be watched for BUY entries if any bearish pullback occurs.

Trade Recommendations:

An inverted Head and Shoulders pattern was established on the chart indicating high probability of bullish momentum.

That's why, the price zone of 0.6800-0.6830 was considered for a short-term BUY entry. Bullish persistence above 0.7050 is mandatory to pursue towards next bullish targets.

S/L should be moved to 0.6990 to secure some profits. T/P level remains projected towards 0.7150 and 0.7240.

The material has been provided by InstaForex Company -