NZD/USD potential head and shoulders formation [Video]
|The NZD/USD pair rebounded in the short term but a downside continuation is still possible. It’s located at 0.6147 at the time of writing, far above today’s low of 0.6113. The price action developed a potential bearish formation, but a downside continuation needs strong confirmation. Fundamentally, the US Unemployment Claims indicator is expected at 221K in the last week above 218K in the previous reporting period. Positive US data could help the greenback to extend its growth. Tomorrow, the US NFP, Unemployment Rate, and the Average Hourly Earnings data should bring high-volatility and sharp movements.
From the technical point of view, the NZD/USD pair dropped below the uptrend line signaling that the upwards movement ended and that the sellers could take the lead. As long as it stays below the downtrend line, the rate could extend its current leg down. A new lower low, dropping and closing below 0.6118 activates the Head & Shoulders pattern.
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