On EURNZD in the second half of April this year we have observed dynamic growth, thanks to which new maxima were established this year. As can be seen on the daily chart below, the growth stopped at the upper limit of the growth channel, where the supply side re-entered the game.
The declines as a result of the rebound from the resistance of the channel managed to recover the half of the previous growth impulse and stopped on the 20-day SMA. Yesterday, however, a price action formation in the form of an inside bar formed on the chart.
An effective break from the aforementioned formation may determine the further direction of movements on the pair. Breaking the minimum of Monday’s mother’s candle, and additionally 50% of the abolition of the last impulse, would open the way to the support of the channel.
On the other hand, if the top of the inside bar is broken, it may turn out that the quotations will again go to the resistance of the channel. The top breakdown would be in line with growth impulse, which was characterized by a high momentum.