The NZD/USD pair has once again risen to the neckline of a topping pattern, despite hitting a new low on June 28. This move could potentially invalidate the pattern and signal a potential upside reversal. This marks the second time the pair has tested the neckline, which has been a key level supporting the pattern’s trough lows since mid-May.
On the 4-hour chart, NZD/USD initially broke below the neckline on June 26, dropping to 0.6068 before bouncing back up the next day. The pair then fell to a new low of 0.6057 on June 28, but failed to sustain the downside momentum. Now, it has once again climbed back up to the neckline, a move known as a “throwback” in technical terms.
The pair formed a bearish Shooting Star candlestick pattern recently, signaling a potential reversal. However, confirmation would require another bearish candle and a break below the June 28 low at 0.6057. In that case, the next target would be between 0.6028 and 0.6015. On the other hand, a close above the 0.6108 highs could cast doubt on the bearish scenario and potentially lead to a short-term uptrend if the pair surpasses 0.6149.
Overall, the current movement of the NZD/USD pair suggests a possible shift in momentum, with the potential for both downside continuation or upside reversal depending on key levels being breached.