FX.co ★ NZD/USD, Head and Shoulders Bearish Reversal Pattern, December 16, 2010 (Daily Strategy)

NZD/USD

The current decline of the NZD/USD pair has been continuing for a month and a half already, although the technical image on the pair inspires a reasonable suspicion that it will continue, perhaps escalate. The head and shoulders bearish reversal pattern created in the last two months signals the end of the pair's secondary trend and the beginning of the new, downwards trend.

Yesterday the pair closed under the pattern's neckline, giving the first signals for entry into a sell deal. A weekly close tomorrow under the neckline at 0.7415 will confirm that this is not a false breach. The first partial realization goal is poised relative to the 0.7020 support level, representing the inherent goal of the reversal pattern. The second, final full realization pattern is poised relative to the strong support level of 0.6820 United States dollars for one New Zealand dollar.