Trade of the Day: NZD/USD
By: Dima Chernovolov
NZD/USD continues to fall inside the hourly Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 5-bar level – which reflects the medium Initial Trend (5 bars), lower Uniformity (3 bars) and significant Clarity (7 bars). NZD/USD is expected to fall further inside this Down Channel – in line with the earlier breakout of the key support area highlighted below.
As can be seen from the daily NZD/USD chart below – the price earlier broke the support area located between the round support level 0.6000 (low of the tall daily Hammer from the start of March) and the lower trendline of the daily down channel from January. This price area is acting as the strong resistance area after it was broken. The proximity of this resistance area and the strength of the active daily downtrend increase the probability NZD/USD will continue to fall inside this Down Channel.