Kiwi creates promising bearish pattern
20 December 2022
The weakest currency among majors is currently the New Zealand Dollar, so let’s check the NZDUSD situation for a promising bearish price action setup.
Take a quick look at the chart and you can already notice something extremely interesting. The price has just formed the Head and Shoulders pattern (grey) and is trying to establish the breakout of the neckline (red) of this formation. Apart from the neckline, we also have two up trendlines here. A shorter black one connecting higher lows since the middle of November and a longer one connecting lows from the middle of October.
NZDUSD breaking the three supports (two up trendlines and neckline) will be a proper, long-term sell signal. As for now, this is the last chance of a defense for buyers – the clock is ticking and the pressure is rising. The price coming back above the black up trendline would cancel the negative sentiment, but chances of that are rather low.