NZD/USD has been trading in a range bound consolidation pattern, potentially forming a Bull Flag continuation pattern on the charts. The pair is currently in an uptrend on a short-term basis, indicating a possible rally upwards. However, for confirmation of this trend, a break above the range high of 0.6153 is needed.
The current consolidation pattern on the 4-hour chart suggests that NZD/USD could potentially reach the first target of 0.6180 if there is a breakout to the upside. This target is calculated by taking the length of the pole and extrapolating it by a 0.618 Fibonacci ratio from the base of the rectangle. A more bullish move could see the pair reaching the 0.6240 target at the 100% extension of the pole higher.
On the other hand, a breakdown below the base of the range could negate the Bull Flag pattern and indicate a more bearish tone on the chart. A closing basis below the base would breach the trendline for the move in May and likely lead to a decline towards the downside target of 0.6035, which is the 0.618 Fibonacci ratio of the height of the range extrapolated lower.
Overall, the current range-bound consolidation for NZD/USD suggests a potential bullish continuation pattern. However, confirmation of this pattern would require a break above the range high of 0.6153. A rally to the targets for the Bull Flag pattern could be seen if this breakout occurs, with the first target at 0.6180 and a more bullish move reaching the 0.6240 target. Conversely, a breakdown below the range base would invalidate the pattern and indicate a bearish trend, leading to a downside target of 0.6035.
