NZD/USD Downside Still An Option
Price dropped in the last hours and erased the morning gains. The Kiwi is trading in the red right now, while the USD is struggling to start another leg higher in the upcoming days. Is premature to talk about an important drop because the price is located much above the 0.7131 lowest low.
Now is very important how will react after the United States data will be released, some positive numbers will lift the greenback. USDX is still trading in the red, but technically, seems a little oversold on the Daily chart. The dollar index stays much above the 91.64 lowest low, a minor consolidation here will signal a reversal on the short term
The United States ISM Non-Manufacturing PMI is expected to increase from 53.9 to 55.8 points, a better report will boost the USD. The Trade Balance and the Final Services PMI will be released as well.
You can see on the Daily chart that the rate has come back to retest the Head and Shoulders neckline (minor red uptrend line). Price has jumped above this line in the yesterday’s session, but failed to close there, we had a false breakout above it today as well. NZD/USD is trading in the red right now and could come back to retest the minor Falling Wedge upside line.
Could drop also to retest the 50% Fibonacci level, I’ve said in the previous report that an accumulation above it will signal an increase at least till the third warning line (WL3).
GBP/JPY Attracted By A Confluence Area
Price is trading in the red and is expected to reach new lows in the upcoming days. Could be attracted by the confluence area formed between the WL1 with the upper median line (uml) of the minor descending pitchfork.
Looks like that the minor rebound is completed, for now, price failed to retest the red uptrend line, signaling that the bulls are exhausted already. A rejection from the confluence area or from the WL1 will confirm another leg higher on the short term, but a valid breakdown will open the door for more declines in the upcoming weeks.
EUR/GBP Breakdown Occurred
Price has finally managed to breakdown below the median line (ml) of the minor ascending pitchfork. The next downside target will be at the 50% Fibonacci line (ascending dotted line), where he may find support again. Could come back to retest the broken median line (ml), signaling that we may have a larger drop.
By Olimpiu Tuns
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