Trade of the Day: NZD/USD

By: Dima Chernovolov

NZD/USD continues to fall inside the well-formed 4-hour Flag chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Flag at the 7-bar level – which is the result of the sharp Initial Trend (9 bars), lower Uniformity (3 bars) and strong Clarity (8 bars). NZD/USD is expected to fall further inside this Flag – in line with the earlier downward reversal from the resistance area shown below.

The high «Initial Trend» value of this Flag reflects the strength of the previous downward impulse which started earlier from the combined resistance area lying between the key resistance level 0,6750 (which stopped the sharp upward correction in June) and the upper daily Bollinger band. The proximity of this resistance area increases the probability NZD/USD will continue to fall inside this Flag.