NZD/USD faces tough resistance March 20, 2017

The NZD/USD has edged higher today and has reached fresh new highs, has jumped much above the 0.7047 last week high and now is pressuring an important area, a rejection from here will send the rate tumbling. The pair could drop only if the USDX will have enough energy to resume the minor bounce back, the index has increased a little today, but continues to be under massive selling pressure.

The USDX’s minor rebound could be only temporary before will drop again, could hit a major support area before will start another broader increase, I’ve said in the last weeks that my feeling is that the USDX will move sideways in the coming weeks because I don’t believe that will have enough energy to make a broader move at this moment.

Price was moved by the technical factors as we had a very poor economic calendar, the Statistics New Zealand will release the Visitor Arrivals later, but I don’t believe that will have an important impact. The rate should increase further in the coming period, right now is located right above the 0.7050 level and could climb much higher if the USDX will drop deeper.

The rate has increased and has managed to resume the Friday’s bullish candle, right now is challenging the 0.7053 static resistance, has jumped above this major upside obstacle, but has failed to stay there. Remains to see if we’ll have a valid or a false breakout above the mentioned resistance. Could find resistance also at the 150% Fibonacci line (descending dotted line), however a breakout above this line followed by a retest will bring more buyers, which will drive the rate much higher in the coming period.

The major upside target remains the first warning line (WL1)  of the major descending pitchfork, could approach and reach this line in the coming weeks if the buyers will have enough energy to take out the mentioned resistance levels. We could have a selling opportunity only if the rate will be rejected from here and if will come to test the confluence area formed at the intersection between he wl3 with the 61.8% retracement level and with the 150% retracement level.

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