Looking technically at the NZDUSD, one can see that the upward trend which we have seen since April this year has slowed down significantly. In addition, on the D1 interval, one can see that a bearish formation of head and shoulders is building up. Currently, the key support is located around the round level of 0.6510 , which is marked with previous price reactions. If price breaks below it, then sell-off may intensify. The potential extent of the head and shoulders formation is marked with rectangles.
NZDUSD interval D1. Source: xStation5
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Create account Try a demo Download mobile app Download mobile appLooking at the lower time frame - H4, one can see that a breakout of the local trend line occurred recently, which is also the neck line of the smaller head and shoulders formation, which suggests a continuation of declines. The baseline scenario is therefore a move towards the previously mentioned support at 0.6510. This area is important not only in terms of classical technical analysis, but also in terms of harmonics analysis. Point D of the potential harmonic Butterfly pattern is located in this area, therefore bulls may try to defended this level.
NZDUSD interval H4. Source: xStation5
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