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NZDUSD Buyers to Face Key Test at 0.6600

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The NZDUSD sold off sharply after testing the 0.6790 resistance level for the second time on September 18th.

But the selloff wasn’t too surprising given the rising wedge that had formed.

I mentioned this structure on September 14th.

I’ve also discussed the multi-year structure at length in recent months.

NZDUSD monthly chart showing a multi-year wedge pattern
NZDUSD monthly time frame

Notice how NZDUSD is holding above the top of this triangle pattern following the false break earlier in the year.

Note that the top of that structure could be as low as 0.6400.

However, as you can see from the daily chart below, NZDUSD has carved an upward sloping flag pattern.

An ascending flag within an uptrend like this hints at weakness.

Sure enough, sellers took NZDUSD below channel support on September 23rd.

That brings us to today’s topic.

As things stand today, NZDUSD buyers face a critical test at 0.6600.

Not only is that a key horizontal level, but it’s also the bottom of the upward sloping flag that extends from the late June lows.

The question now is whether or not buyers can close NZDUSD back above 0.6600.

If they can, it would suggest that the recent breakdown was a false move.

It would also re-expose 0.6790.

On the other hand, if NZDUSD carves a bearish candlestick pattern from the 0.6600 area, it would hint at another leg lower for the pair.

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NZDUSD daily chart showing upward sloping flag pattern
NZDUSD daily time frame

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6 comments
Justin Bennett says

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Emmanuel says

Thanks for the update, may be the pair just want to test the bottom of your channel before it goes down

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ali says

Thanks for the update sir justin.

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Oniyide Kayode says

Thanks for the information Justin

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Olusegun Isaac says

Thanks a lot for your update.It is a very good analysis

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Olusegun Isaac says

Yes NZDUSD has broken above 0.6600 on the daily chart but my bias still remain bearish as far as this pair is concern. am still expecting new low.

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