NZDUSD – Attempting to refocus on 0.8075 with a failed H&S pattern
A larger corrective downtrend started from 0.8845 (Aug’11 high) appears to be still in force which allows for a retest of the 0.7455/0.7370 support on multimonth basis. However, the corrective recovery from 0.7455 (June low) has the potential to test the 0.8240/0.8320 resistance. The swing high at 0.8475 is likely to cap the strength in the medium term (A multimonth triangle pattern?). A break below 0.7700/0.7670 would renew the bear trend toward 0.7455 initially.
The pair has made a low at 0.7805 with a daily bullish piercing candle. The daily chart pattern appears to be a bullish failed H&S. Immediate resistance is now at 0.7950/0.7980. A break above would refocus on 0.8055/0.8075. A break there extends the uptrend toward 0.8240/0.8320. We expect the 0.7885/0.7850 support to hold now on weakness ahead of 0.7805. A reversal below however favours bears and targets 0.7700/0.7670 next.
Anantharajan .P, CMT (Technical Strategist, Precise Trader)
