NZD/USD Rejected at Resistance, Breakdown Confirms Bearish Setup

A lot is happening on the U.S. dollar today, and one of the most technically interesting charts right now is NZD/USD. After a brief recovery attempt, the pair appears to be resuming its dominant downtrend — and the setup is sending a clear warning to bulls.

Throughout July, NZD/USD has been under consistent selling pressure. Most recently, we saw a bullish correction, forming inside a black wedge pattern — a common structure that often signals continuation after a pause in trend.

This wedge came close to breaking out to the upside. Price almost cleared the orange downtrend line, but momentum quickly faded. The failure to hold above that level has resulted in a false bullish breakout, clearly marked in red — a bearish signal in itself.

Now, price is breaking below the lower edge of the wedge, adding a second bearish trigger to the mix. This combination — a failed breakout to the upside and a bearish breakdown out of the wedge — significantly increases the probability of a deeper move lower.

If the pair closes its current H1 candle — and subsequent candles — below both the wedge and the orange downtrend line, we’ll have confirmation of a valid sell signal.

On the other hand, if the price recovers and pushes back above the orange resistance, that failed breakout would be neutralized, and bulls could regain control. In that case, it would be an invitation to go long.

But for now, momentum is pointing down — and traders should watch for follow-through below today’s breakdown level.

Source: https://www.axiory.com/analytics/technical-analysis/nzd-usd-rejected-at-resistance-breakdown-confirms