Trade of the Day: NZD/USD

By: Dima Chernovolov

NZD/USD recently broke the neckline of the 4-hour Head and Shoulders chart pattern which was previously identified by Autochartist. Autochartist rates the quality of Head and Shoulders chart at the 7-bar level – which is the result of the significant Initial Trend (7 bars), strong Uniformity (9 bars) and lower Clarity (3 bars). NZD/USD is expected to fall toward the forecast price 0.7010.

As can be seen from the daily NZD/USD chart below – the price earlier broke the support area located between the key support level 0.7100 (which has been reversing the price from December) and the 38.2% Fibonacci correction of the upward price impulse from October. This price area is acting as the resistance zone after it was broken. The proximity of this resistance area increases the probability NZD/USD will continue to fall toward the forecast price 0.7010.