NZD/USD has formed a complex multi-peak topping pattern which is at risk of breaking down now that the pair’s “neckline” – the level underpinning its trough lows – at around 0.6100, has been decisively pierced.
NZD/USD is recovering in a throwback move to the neckline of a topping pattern it recently pierced. The pair is at a critical point – whilst the odds favor a resumption of the downside bias, a continuation higher is possible. A break below the June 26 low would confirm a continuation down to a target for the topping pattern. NZD/USD 4-hour Chart NZD/USD pierced cleanly through the neckline on June 26 and fell to a low of 0.6068.
This is a move that comes immediately after a breakout from a chart pattern in which the price recovers back to the original boundary line, or in this case neckline. The throwback is usually only a temporary recovery before price surrenders to the overwhelming downwards pressure and falls back down to the pattern’s breakout target. However, this is not always the case and sometimes price will recover. A break below the June 26 low at 0.
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