NZD/USD 4H Chart: Ascending Broadening Wedge

Since Mar 18 the trading range of NZD/USD has been widening. It has grown from 140 pips to as much as 220 pips during the last month. As a result, there is an ascending broadening wedge being formed on the four-hour chart.

In the near term the kiwi is likely to be sold off, as the currency pair has just encountered the upper rising trend-line at 0.8760. Eventually, the decline should extend down to 0.8520, the lower boundary of the pattern; but there is a number of tough supports that stand in its way, such as the weekly S1 level at 0.8594 and the 200-period SMA at 0.8562. Meanwhile, the distribution between the long and short positions is 25% and 75% respectively.