Yesterday's data from the New Zealand job market revealed that the Unemployment Rate rose higher than the analysts’ estimates. This is negative for NZD and the currency has been suffering heavy losses since Monday. The big contributor: a technical situation with the Head and Shoulders pattern.
The reversal from the beginning of the week is a false breakout above the neckline of the big inverse head and shoulders pattern. NZD/USD loves this structure. The head of this is built from a smaller IH&S. What is more, the right shoulder had two H&S patterns inside. The last one is the false breakout mentioned above. As a technical analyst, this is amazing. The sentiment here is negative.
CHF/JPY is the second in the pair of safe heavens. Currently, we are inside of a pennant, which is formed after the breakout of two major down trendlines.
The bullish momentum seen recently is being fueled by the double bottom formation on the long-term chart. Currently, most traders are waiting. The price is breaking the upper line of the pennant would signal us to go long, while price breaking the lower line would signal us to go short.
The last one is gold, where we are also inside of the sideways trend. The price did not manage to break the 1518 USD/oz resistance, which caused a proper drop. Now, we are testing the lower line of the rectangle. As long as we stay above, buyers can be optimistic but breakout to the downside would change the outlook to a negative one.
NZD/USD False Breakout