- NZD/USD has reached a strong level of resistance on the monthly chart following a 5-wave bullish run to the upside.
- Bears will be laying out their trade plans for a test back to the downside at this juncture.
In the following analysis, from the top-down, the various critical levels of support and resistance have been identified as market structure starting with the monthly chart and moving into the weekly and daily.
From the monthly, a reverse head & shoulders (H&S) pattern could be in the making should the right-hand shoulder start to form. The pattern is a longer-term H&S bullish pattern, which fits the global recovery narrative nicely.
However, the immediate technical bias, based on the market structure analysis with price now in a supply zone, is bearish.
On the daily chart, we can map-out the prospective targets of the Fibonacci retracements should the 5-wave weekly pattern come to fruition at the current supply-zone.