NZDUSD Forms Double Top After Impulsive Bullish Displacement

The NZDUSD pair has seen consistent buyer defence at the 0.55850 demand level throughout the year. Following the latest retest, a sharp bullish displacement occurred, but the market has now formed a double top pattern, signaling potential weakness.

Demand Zones: 0.5830, 0.5590, 0.5400

Supply Zones: 0.6000, 0.6200, 0.6370

The 0.5830 level has been pivotal in NZDUSD price action, acting as support from December 2023 to December 2024. After a temporary breakdown, it transitioned into resistance, leading to a prolonged consolidation phase until April 2024. The recent bullish breakout above this level suggests a potential role reversal, with 0.5830 now acting as new support.

The strong upward surge in April created a market inefficiency zone, but upon reaching the psychological 0.6000 barrier, a double top pattern emerged, indicating a possible pullback. The bearish crossover on the MACD further supports the likelihood of a deeper retracement.

On the 4-hour chart, a bearish shift in market structure is evident. Buyers may seek support near 0.5830 if the pullback extends to regain momentum lost during the breakout phase. A hold above this level could reinforce the bullish trend, while a breakdown may lead to a test of lower demand zones.

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