NZDUSD Makes Sudden Reversal

The NZDUSD pair has staged a swift and unexpected bullish reversal following a bearish breakout. This price behavior suggests that institutional players may have exploited market liquidity to engineer an aggressive upward movement, catching many traders off guard.

Demand Zones: 0.5550, 0.5470

Supply Zones: 0.5860, 0.6400

After reaching the demand zone at 0.5550, NZDUSD entered a corrective phase, forming a bullish parallel channel. Price action ascended steadily within the channel until it retested the former support level at 0.5860.

Earlier this month, a sharp bearish breakout occurred from this channel—likely triggering sell orders from breakout traders. However, this move proved deceptive. Upon returning to the 0.5550 support zone, a clear bullish reversal formed, highlighted by the emergence of three white soldiers on the daily chart. A subsequent strong bullish candle confirmed a Change of Character (ChoCh), signaling a renewed upward trend.

On the 4-hour chart, a bullish crossover of the MACD and signal lines below the zero line signaled an early momentum shift. This coincided with a visible double bottom formation at the 0.5550 level, strengthening the bullish case.

Both the daily and 4-hour volume indicators revealed a sharp increase in trading activity, indicating heavy order flow likely drove this reversal. With the current momentum, NZDUSD is expected to retest the resistance level at 0.5860 in the short term.