NZD/USD Intraday technical levels and trading recommendations for January 8, 2018

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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 advance towards the next price zones around 0.7150-0.7230 (the key zone) and 0.7310-0.7380 which was temporarily breached to the upside.

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 (the key zone) which failed to pause the ongoing bearish momentum.

An atypical Head and Shoulders pattern was expressed on the depicted chart which initiated 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 bullish recovery were expressed around the recent low (0.6780). That's why, a bullish pullback is expected towards 0.7050.

Moreover, a further advance should be expected towards 0.7250 if the current bullish momentum is maintained above the key level of 0.7150.

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 a 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 0.7150 is mandatory to pursue towards next bullish targets.

S/L should be moved to 0.7130 to secure some profits. Remaining T/P level remains projected toward 0.7240.

The material has been provided by InstaForex Company - www.instaforex.com