Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
NZDUSD is at risk of breaking below a key level I wrote about yesterday.
Since coming off support at 0.6490 on June 18th, the pair has carved an ascending channel.
The pattern by itself isn’t necessarily bearish.
However, when we combine it with the longer-term downtrend here, it represents consolidation ahead of what could be the next leg down.
Look no further than what happened recently to AUDUSD.
We had a similar ascending channel within a broader downtrend. That combination has triggered an abrupt 80 pip drop in two days.
But NZDUSD sellers still have some work to do here.
The pair is hovering just below channel support at 0.6630. Until NZDUSD closes the day below ascending channel support, we have to be careful about getting too bearish.
If sellers do close today below that 0.6630 area, I will begin watching for selling opportunities on retests of it as new resistance.
As I mentioned yesterday, key support comes in at 0.6490.
Alternatively, a daily close back above 0.6640 today would keep the channel intact a while longer.
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