NZD/USD HEAD AND SHOULDERS PATTERN TRIGGERED

NZDUSD

It seems the rate is ready to start the new year with a boo. Risen up to test the former broken large head and shoulders pattern neckline as the new resistance, it is now experiencing a sharp sell-off indicating that it may be ready to take the next leg lower.

The only concern with an immediate entry is the broken lower parallel of the falling channel which I was looking to become the new resistance.


The 4H chart shows us a very nice possible entry set-up. The rate has formed a small rising wedge with the previous test of the pattern's lower boundary being the yearly close and the already mentioned channel support.

So I am looking for a clean break below the yearly close at 0.6918 to take on new short positions to target the possible longer term rising trendline around 0.6780.