NZD/USD Breaks Below Crucial Support
Axiory | Jul 01, 2022 04:40AM ET
Asian sessions are usually quiet on the forex market, with lower volatility and no strong, directional movements. The first day of July was different, though. The price moved, and it moved a lot. Interestingly, it went against what was happening during the end of the European and American sessions, but it was in line with the mid-term trends.
Overnight NZD/USD managed to break crucial horizontal support, triggering a great sell signal. NZD/USD had been in a downtrend for some time, but most recently, it managed to establish concrete support on the psychological barrier of 0.62.
This support worked in the middle of May, June, and yesterday until sellers decided it was enough and broke it with a nice bearish candle. Also, in the last two weeks, the price created a nice pennant (black lines), which ended with a breakout to the downside, which could have been a hint for us regarding the direction of the next movement.
We have a solid sell signal as long as we stay below the 0.62 resistance. The price climbing above that resistance would mean a false breakout and be a great signal to buy. But for now, this scenario is less likely to unfold.
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