NZD/USD Downside Reversal Still Possible
NZD/USD escaped from a major up channel and now is trapped within a minor up channel pattern. Dropping from this pattern could signal that NZD/USD will develop a corrective phase, downside movement.
The price has shown some overbought signs by failing to reach the minor channel’s upside line. You should know that the black uptrend line, the channel’s downside line, and the 0.7160 level acts as strong support levels, downside obstacles. The demand could be high at these levels.
Technically, dropping below the black uptrend line and under the 0.7150 level could mean that NZD/USD will continue lower developing a potential downtrend.
Sell NZD/USD if it drops below 0.7150 and stays there for two trading sessions, 48h hours. Such a downside breakout could lead the price down to the 0.7000 psychological level in the coming weeks.
The material has been provided by InstaForex Company – www.instaforex.com