NZDUSD Twofold Scenario Possible

Nenad Kerkez

The NZDUSD has broken some bullish order blocks and surged upwards reaching 0.6790 zone. The move was initiated by a technical break of a previous order block just above inverted head and shoulders neckline. The move was rejected from the 0.6790 zone and we can spot head and shoulders pattern in progress.

We have 2 possible scenarios. POC is important here because the pair will either break or bounce. The POC zone (L4, 50.0, E89, ascending trend line) comes within 0.6595-0.6615 and only the break below 0.6690 will target lower 0.6560 and 0.6505 subsequently. If the pair bounces from POC we should watch for 0.6660 and 0.6690. Have in mind that 0.6690 will become the top of right shoulder so we could see some initial selling from that level. If you were following my webinars with Admiral Markets you know that we can use the top of the right shoulder as a confluence for short trades. Additionally our Sentiment Trader tool is telling us tat even lower time frames are indecisive now which confirms the twofold scenario further.

NZDUSD 4 Hour Chart