NZDUSD – Expanding Triangle, Likely Breakout | May 7th
NZDUSD – Expanding Triangle, Likely Breakout
The Kiwi sold off heavy today after making a new high for the year. The overall structure as you can see via the chart below is an expanding triangle (or what is called a Y-wave in Ichimoku Wave Theory). Generally these structures favor breakouts in the direction of the expanding price action.
This makes sense from an order flow perspective if you think about it, as the buyers continue to make new ground, yet hold the line/sellers at the stable support, suggesting one side has more strength.
I’m suspecting a trip back to the horizontal support around 8520/8500. Traders can look to buy at this level with tight stops below. Only a daily close below 8500 would suggest the structure failed (save for a potential false break, then a retaking of 8500).
Upside targets are 8750 & 8836, with the latter being the all time high for the pair.
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