As long as the NZD/USD pair continued trading above 0.6860, further bullish advance was expected towards the upper limit of the depicted channel around 0.7400.
During August and September, a consolidation range was established between the price level of 0.7250 up to 0.7350.
Later on October 20, the lower limit of the consolidation range (0.7250) stood as a temporary resistance which initiated a bearish movement towards 0.7100 (the lower limit of the depicted channel).
Bullish recovery was expressed around the price level of 0.7100 on October 28. Hence, a double-bottom pattern was expressed on the chart.
Bullish fixation above 0.7250 and 0.7350 was needed to allow further bullish advance towards the projection target of the reversal pattern around 0.7450.
However, significant signs of bearish reversal were expressed around the upper limit of the price range (0.7350).
Bearish breakdown of 0.7250 (lower limit of the depicted range) enhanced the bearish side of the market towards the price level of 0.7100 (the recent bottom of October 28) which is being challenged today.
Bearish persistence below 0.7100 allows quick bearish decline towards 0.6960 where bullish rejection and a valid BUY entry should be expected.
The material has been provided by InstaForex Company - www.instaforex.com