The price zone of 0.7320-0.7390 stood as a significant supply zone during the recent bullish pullback. The bulls failed to execute a successful bullish breakout above 0.7400 during the previous week's consolidations.
The NZD/USD pair had been trapped between the price levels of 0.7170 and 0.7350 until a bearish breakdown of 0.7200 occurred yesterday.
Since April 13, significant bearish pressure has been applied. This probably turns the short-term outlook for the NZD/USD pair into bearish giving significance to the multiple-top reversal pattern.
That's why, a bearish breakdown of 0.7220-0.7170 (neckline zone) was needed to confirm the depicted reversal pattern. Bearish projection target would be located around 0.7050 and 0.7000.
The bearish scenario needs an obvious bearish breakdown below 0.7050 to maintain significant bearish momentum towards 0.7000 and 0.6890.
On the other hand, the price zone of 0.7220-0.7170 (neckline zone) stands as a significant supply zone to be watched for a valid SELL entry if any bullish pullback occurs.
The material has been provided by InstaForex Company - www.instaforex.com
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