NZD/USD Hit Another Downside Target
NZD/USD dropped as much as 0.7222 level, where has found support again. Price squeezed a little in the last hours, but this could be only temporary because remains under selling pressure. USD is expected to drive the rate much lower on the Daily chart as the dollar index is trading above the 94.00 psychological level. A valid breakout above the psychological level will confirm a larger rebound and a USD dominance.
The greenback needs more support from the United States data to be able to resume the upside movement. The US will publish the Building Permits later, which are expected to decrease from 1.28M to 1.25M in July, while the Housing Starts could remain steady at 1.22M for the second month in July. The main event will be the release of the FOMC Meeting Minutes, we may have a high volatility after this event.
NZD/USD tries to recover after the massive drop. You can see that has found strong support at the red downtrend line, a false breakdown below this obstacle will send it towards the 38.2% retracement level. Technically is expected drop further after the breakdown below the fourth warning line (wl4).
We may have a rebound only if the USDX will slide again. The next major downside targets remain at the fifth warning line (wl5) and at the WL2. A minor increase could signal a Head and Shoulders pattern on the Daily chart.
Price continues to move sideways on the Daily chart as the Nikkei failed to resume the corrective phase. The rebound invalidated the breakdown from the symmetrical triangle and now is expected to reach and retest the 38.2% retracement level and the third warning line (WL3). A valid breakout above the WL3 will confirm a further increase in the upcoming weeks, while only a valid breakdown below the wl1 will signal a major drop.
Price increased significantly today and now is retesting the median line (ML) of the major ascending pitchfork. It has erased the yesterday’s losses, even if the USDX stays higher. Could drop again if the US data will come in better later and the FOMC Meeting Minutes will signal a rate hike in the upcoming period.
Has found support at the lower median line (lml) of the minor descending pitchfork and now could climb to retest the median line (ml) as well. Only a valid breakdown from the minor ascending pitchfork will confirm a major drop.
By Olimpiu Tuns
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