- NZD/USD created a bullish outside day on Wednesday.
- The pullback has ended, but bull reversal depends on today’s close.
NZD/USD is mildly bid above 0.6650 at press time, having created a big bullish outside day candle on Wednesday.
A bullish outside day occurs when the day begins with bears in control but ends on an optimistic note, engulfing the high and low of the previous day.
The candlestick pattern is widely considered an early sign of potential bearish-to-bullish trend change. The reversal, however, is confirmed only if the following day’s close is above the candlestick’s high.
Hence, today’s close is pivotal for NZD/USD. A close above 0.6657 (yesterday’s high) would add credence to the bullish outside day and open the doors to a retest of the recent high of 0.6727.
On the other hand, a close below 0.6565 (Wednesday’s low) would signal a continuation of the sell-off from the recent high of 0.6727.