- NZD/USD is likely to correct a portion of the downside, holding at support.
- Bears will be waiting patiently for the next downside confirmation.
NZD/USD is playing out in the makings of a reverse head and shoulders on the monthly time frame.
In the meantime, the bulls have an opportunity to clean up some of the destruction left behind by the bears in the latest sell-off to support structure.
The following is a top-down analysis of the monthly, weekly and daily chart which illustrates the various compelling patterns and markets structures.
Monthly reverse head and shoulders in the making
Weekly support and resistances
The weekly chart offers a triple top scenario with the makings of a head and shoulders and the case for the downside once the bulls complete the correction to the shown resistance structure.
Bulls will be looking to the lower time frames, such as the 4-hour charts, in order to take advantage of any progress to the upside.
However, the bears will have bigger fish to fry if the upside target is achieved where there is a more compelling case for the downside in the reverse head and shoulders pattern on the monthly chart.