Double Bottom Pattern: In the daily NZD/USD chart, we can see the kiwi-us dollar pair form a double bottom after failing to break below 0.7176. The pair broke above 0.7613 resistance to start the week, but has since held below 0.77, which is indeed a key support/resistance pivot. The inability to break this level would reflect a false bullish breakout. With the prevailing bearish trend still intact, a false bullish breakout could translate into a bearish continuation signal. NZD/USD Daily Chart 3/27(click to enlarge) Now, in the daily chart, the bullish signs are:1) The double bottom2) Price crossing above the 50- and 100-day simple moving averages (SMAs). However, this sign is a weak one because price is still under the 200-day SMA, and has not been able to clear the 100-day SMA. The bearish signs are:1) The prevailing downtrend remains intact and the the previous multi-month consolidation from October through January is still holding as resistance.2) The RSI is holding under the 60 level, which suggests maintenance of the prevailing bearish momentum. Let’s take a look at the 4H chart for a closer look at this double bottom. NZD/USD 4H Chart 3/27(click to enlarge) In the near-term, there is room to fall that wouldn’t invalidate the double bottom attempt. When price approaches 0.7450 however, we should expect support. Why?1) This is a previous resistance pivot at 0.7444, which should hold as support if the rally since 3/11 (0.7186) is to extend.2) This is at the bottom of the 200-, 100-, and 50-period SMA cluster. A break below this cluster would kill the bullish bias established in the past couple of weeks.3) There is a rising speedline from the 0.7186 low made on 3/11. A bullish market would then keep the 0.77 handle in sight with risk of correcting higher. Bearish Scenario: Now, a break below 0.7440 would open up the 0.73 handle, especially if the 4H RSI falls below 40. In this scenario, if a subsequent bullish attempt fails to bring the NZD/USD back above the moving average cluster, pressure will mount towards the 0.7186 low as well. We have another key resistance if price approaches the 0.7875-0.79 area.