The NZD/USD pair has been trending up within the depicted bullish channel since January 2016.
In November 2016, early signs of bullish weakness were expressed on the chart when the pair failed to record a new high above 0.7400.
A bearish breakout of the lower limit of the channel took place in December 2016.
In February 2017, the depicted short-term downtrend was initiated in the depicted supply zone (0.7310-0.7380).
However, a recent bullish breakout above the downtrend line took place in May 22. Since then, the market has been bullish as depicted on the chart.
The price zone of 0.7150-0.7230 (SUPPLY ZONE in confluence with 61.8% Fibonacci level) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.
This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 which is being temporarily breached to the upside.
Now the price zone of 0.7310-0.7380 turns to be a newly-established demand-zone to be watched for possible bullish rejection if any bearish pullback occurs.
The material has been provided by InstaForex Company – www.instaforex.com