Daily Outlook
In July 2017, an atypical Head and Shoulders pattern was expressed on the depicted chart which indicated upcoming bearish reversal.
As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, a further bearish decline was expected towards 0.6800 (the reversal pattern bearish target).
Evident signs of bullish recovery were expressed around the depicted low (0.6780). Besides, an inverted Head and Shoulders pattern was seen around these price levels.
The price zone of 0.7140-0.7250 (the prominent supply zone) failed to pause the ongoing bullish momentum. Instead, a bullish breakout above 0.7250 was expressed on January 11.
That's why, the current bullish movement extended towards the price levels of 0.7320 and 0.7390.
A quick bullish movement was expected towards the depicted supply zone (0.7320-0.7390) where an evident bearish rejection and a valid SELL entry were expected.
On February 2, a bearish engulfing daily candlestick was expressed. This enhances the bearish scenario initially towards the price levels of 0.7230 - 0.7165 where recent bullish recovery was expressed.
The current price zone (0.7320-0.7390) remains a significant supply zone to offer a possible bearish rejection and another SELL entry. Stop Loss should be set as a daily candlestick above 0.7450.
Bearish fixation below 0.7300 is needed to allow a further decline towards 0.7160 and 0.7090.
The material has been provided by InstaForex Company - www.instaforex.com