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NZDUSD had been in a steep downtrend since early July. After falling 1,130 pips, the pair began consolidating into a bear flag pattern in late September.
The pair broke out of the pattern on October 23rd with a daily close well below channel support. The market quickly recovered back inside the channel, however that recovery was short lived as the pair formed a large bearish outside bar on October 29th.
From here we can look to the .7860 level to act as resistance. This area has served as support and resistance since the pair began consolidating in late September.
Summary: Look to sell any rallies into .7860 using bearish price action as a signal to go short. The first support level comes in at .7710. A break of that level could send this pair much lower to the next area of support around .7340.
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