NZDUSD trading inside of a wedge
23 December 2022
The last analysis before Christmas will be a short update on the NZDUSD, which is currently in a very important place. We already mentioned this instrument a few days ago as we spotted a promising sell signal when the price was breaking the blue down trendline. The signal was spot on as the price declined, making new, mid-term lows.
To be precise, after the breakout of the blue up trendline, NZDUSD tested it as a resistance, then created two shooting stars on the H4 chart (yellow), and then dropped around 70 pips. Currently, the price is in the wedge pattern (orange), which in theory promotes the breakout to the upside. On the other hand, the price is under the up trendline and also under the influence of the Head and Shoulders pattern (grey) is rather negative.
Which side will win? Again, to answer this question, we have to wait a bit for further development on the chart. Price bouncing off the upper line of the wedge will be a strong signal. On the other hand, the price breaking this resistance and then, coming back above the neckline (red), will be a cancellation of the negative sentiment and a proper mid-term buy signal. We will find the answer after Christmas.