The NZD/USD has extended its recent gains following the formation of an Inverted Hammer candlestick pattern at 0.8060. However, the upside momentum appears to be stalling in intraday trade today as the pair faltered at critical resistance at the 0.8390 mark, which has suppressed gains since
The daily candle appears to be forming a Shooting Star pattern in early trade, which may be hinting at a correction. Given the risks inherit in trying to pick reversals, the close of the daily bar and confirmation from a successive down day is required before offering a bearish bias.
It is also noteworthy that the DailyFX Speculative Sentiment Index continues to grow more negative, with the highest open interest for shorts on record. As a contrarian indicator, this suggests gains may continue.