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  • NZD/USD is in the midst of a powerful upside correction.
  • Bulls are mapping out the Fibonacci confluence targets. 

NZD/USD has been tracked in a series of technical analysis since August from when the makings of a monthly reverse head and shoulders pattern had been identified.

From the outset, the price action has been analysed and various opportunities were identified for trading opportunities while the monthly downside continued to play out, just as expected. 

The flow of analysis to date is as follows:

  • NZD/USD Price Analysis: Bears stacking their chips at critical support structures
  • NZD/USD Price Analysis: Longer-term bullish, short-term bearish
  • NZD/USD Price Analysis: Fading opportunity for 1:3 risk to reward
  • NZD/USD Price Analysis: Bearish opportunities below current resistance
  • NZD/USD Price Analysis: Bears giving way to the bulls until 0.6710/20 resistance
  • NZD/USD Price Analysis: Bearish environment opens 1:3 R/R setup
  • NZD/USD Price Analysis: Bears in control, testing below key structure
  • NZD/USD Price Analysis: Bears on verge of test of trendline support
  • NZD/USD Price Analysis (update): Target achieved to trendline support ahead of RBNZ
  • NZD/USD Price Analysis: Will the US dollar now give back some ground to the dollar bloc?
  • NZD/USD Price Analysis: Bears await the next opportunity, but it could be a while

As per the latest analysis in the above series, NZD/USD Price Analysis: Bears await the next opportunity, but it could be a while, the upside resistance structure is the next target. 

Once the upside has been achieved, the attention will then resume back to the downside. 

The following is a top-down analysis from the monthly chart, the weekly and daily to the 4-hour from where a trading opportunity to the upside has been mapped out.

Monthly reverse head and shoulders in the making

Weekly structures

Daily chart, mapping the Fibo targets

4-hour chart, looking for bullish confirmations

At this stage, the conditions are still not ideal for entry as bulls would be prudent to wait until the momentum indicators are more bullish and price pulls away from the 21-moving average.

The price will indeed need to move higher towards the Fibo targets, but bulls would be on the lookout for structure lower down below price from where a buy-in at a discount might be achieved on pullbacks.