NZD/USD was trading around 0.6540; it had touched a low of 0.6488 on Thursday.
The pair has recovered above 0.6520 after the recent breakdown from a head-and-shoulders pattern, in the four-hour chart. 0.6520 constitutes the neckline of the said pattern, and a move above it suggests the failure of the recent breakdown attempt.
But, market participants are aware of the numerous instances in which such a price-action kick out weak hands – by revisiting earlier support-turned-resistance levels; and then continue the bearish course with strong momentum.
If NZD/USD trades below 0.6520, then the June 30 low horizontal support at 0.6385 will be in play. Such a bearish move is not out of the question as the 14-day relative strength index is bearish with a sub-50 reading.
The NZD/USD bulls have to wait for a close above Wednesday’s high of 0.6651 to be back in command.