In yesterday's analysis on NZDUSD we mentioned the preferred scenario of the creation of a possible head and shoulders pattern. Price has turned lower from 0.6635 and is now below 0.66, in what we believe is the right hand shoulder of the bearish pattern.
Blue line -neckline support
Black lines - head and shoulders pattern
NZDUSD is moving closer towards the neckline support. As long as price does not break below the neckline, the head and shoulders pattern is not confirmed and not activated. Major resistance remains at 0.67-0.6750. Bears want to see the neckline support at 0.65-0.6520 to fail to hold in order for price to continue lower towards 0.64-0.6350.
