Just the other day I mentioned the possibility that the NZDUSD has been carving out a five-month head and shoulders reversal. While hardly confirmed, I do suspect the pair will face some headwinds at current levels.
For example, I made the following post inside of the member’s area on Wednesday.
This is a simple technique that I wrote a lesson on a while back. All we’re doing is extending a parallel level from the two swing lows to find a potential area of resistance.
Flash forward to today, and we can see that the pair is beginning to struggle in the area outlined above.
Channel resistance also lines up with several prominent highs from August and September. This doesn’t mean prices will reverse from here, but it does illustrate a confluence of resistance that will surely put up a good fight.
On top of that, the 1-hour chart is starting to look top heavy. I very rarely look at a time frame below the 4 hour, but after seeing the formation below, I felt inclined to comment on it.
The structure could indicate a short-term reversal, or it could be nothing at all. But if sellers manage a close below this 1-hour trend line, chances are we’ll see the pair give back at least a portion of recent gains.
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