NZD/USD Formed a Signal for a Move to the Downside

The announcement of the rate statement of the Reserve Bank of New Zealand had a great effect on the market.

Although the bank did not change the interest rate, the NZD/USD pair formed a 40 pips bullish gap, and the overall move to the upside lasted for 130 pips.

Today there is a real chance for this gap to be recovered, and at the beginning of the London session the pair had good signals for short positions.

On the four-hour time frame there are two spinning top candlesticks, and on the one-hour time frame there are two candlesticks forming a tweezer top.

Those candlesticks were a signal for a move to the downside and that move began at the start of the London session.

With that in mind I expect that the pair will recover the gap.
As for the longer term prognosis – on the larger time frames the pair is forming a slightly bullish sideways consolidation, so we need to keep our eyes open to see in which direction there will be a breakout.