Daily Price Action

NZDUSD to Attempt End of Year Rally?


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The month of December often marks a period in which reversal risk is heightened for pairs that have made extended moves over the last few months. One such pair that fits this description is NZDUSD.

The market has been in a downtrend since early July, losing 1,000 pips in the process. However since hitting a year low last month, the pair does appear to be attempting a reversal. Of course we’ll need to see something compelling before jumping on the bullish bandwagon.

One pattern to keep an eye on is this descending channel, which is coming off a 300 pip rally from the year low of .7660. At first glance this pattern appears to be bullish as it’s coming off the inverse head and shoulders pattern from early November.

That said, we’ll need to be patient and let the market show us which way it wants to go. For that we’ll need to see a close outside of support or resistance.

Summary: Wait for a close outside of channel support or resistance and then watch for price action on a retest to trade in the direction of the break.

NZDUSD 4 hour forex chart

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GBPCAD daily forex chart

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