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NZDUSD: Be Careful Not to Get Too Bearish

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The idea that NZDUSD could weaken over the coming weeks is real.

If you saw my forecast from two weeks ago, you know why, at least from a technical perspective.

The rising wedge on the daily time frame hints at the potential for a pullback.

However, the higher time frames suggest any weakness may be temporary.

NZDUSD monthly wedge pattern
NZDUSD monthly time frame

Notice how the NZDUSD is holding well above its multi-year trend line following the March false break.

As long as the New Zealand dollar is above that level near 0.6400 on the higher time frames, I can’t get too bearish.

Furthermore, any pullback here could introduce a new bullish structure.

NZDUSD weekly inverse head and shoulders
NZDUSD weekly time frame

The weekly chart above illustrates how a pullback to 0.6500 or even 0.6400 may carve the right shoulder of a massive inverse head and shoulders.

Of course, that doesn’t mean it will happen.

But if it does, this pattern is worth keeping a close eye on as it implies a 1,300 pip rally if buyers can clear 0.6750.

That hinges on a rotation lower first, though.

If NZDUSD continues to push higher and doesn’t respect the rising wedge in the chart below, then the inverse head and shoulders may not play out.

In summary, any weakness from NZDUSD toward 0.6500 or 0.6400 may be temporary, given what I see on the higher time frames.

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NZDUSD rising wedge on the daily chart
NZDUSD daily time frame

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6 comments
Justin Bennett says

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ali says

Thanks for the update sir justin.

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    Justin Bennett says

    You’re welcome.

    Reply
Bharzert Agoe says

Great analysis. On point.

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    Justin Bennett says

    Thanks. Glad you found it helpful.

    Reply
Chinenye says

Insightful as always,
Thank You.

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