Today we’d look at the exchange rate between the American and the New Zealand dollars. At the end of last year this pair appeared to be locked within a channel between 0.6860 and 0.6990, but it was able to rise and overcome it eventually. After overtaking the 0.7000 level, the pair continued its bullish movement even higher, passing the resistance at 0.7100. The NZD/USD was thus able to reach the sell zone between 0.7250 and 0.7350, where the pair was finally forced to retreat back down.
The NZD/USD proceeded to drop to the support level of 0.6960, and then continued moving lower. We initially assumed that the bearish trend will continue and the prices will sink further toward the buy zone, but this is not exactly how things went. The pair appeared to turn bullish and moved up instead of the predicted down, yet this struggle was weak and failed to break above 0.7050, which led to another locking within the 0.6860-6960 range, where we started.
Overall, we can say that the pair is exhibiting a 1-2-3 pattern on the chart (with a bullish nature), because it managed to fix above 0.6900 every day. Learning more about this type of pattern might be helpful if you are trying to trade on this pair. Otherwise, you can keep an eye on it for when it breaks above this level and starts gaining upwards momentum again, especially if you see it is headed for the key level at 0.7250.
As of the moment of this article’s publication the pair is trading around 0.6893 (towards the upper end of the channel mentioned above). Most technical indicators are showing us sell and strong sell signs.
