The currency pair has increased today and has climbed above the 0.7229 yesterday’s high, now is pressuring an important dynamic resistance, remains to see if will have enough directional energy to take out the resistance. The NZD has dragged the rate higher as the USD was punished by the USDX’s impressive drop. The index has decreased sharply today and has resumed the yesterday’s bearish candle, has erased the last 4- days gains, a further drop will force the greenback to decrease further versus its rivals. I’ve said in the last week that the USDX could move sideways on the short term because I don’t believe that will have enough energy to start a broader rebound at this moment.
The USD continues to drop despite the good US data, the dollar is uninspired by the United States figures, remains to see for how long.
Remains to see how the price will react after the New Zealand data will be sent to the public, Statistics New Zealand will release the Retail Sales later, which are expected to increase by 1.1%, more compared to the 0.9% growth in the former reporting period, while the Core Retail Sales could increase by 0.9% in the Q4, more compared to the 0.3% growth in Q3.
The price has resumed the minor bounce back and now is challenging the second warning line (wl2) of the former ascending pitchfork, this rebound could be only temporary if the dynamic resistance will hold, the minor corrective phase could resume if the rate will fail to climb above the 23.6% retracement level. Is approaching also the former downtrend line, we have a strong confluence area formed at the intersection between the warning line (wl2) with the 23.6% retracement level and with the downtrend line, a rejection from there will open the door for more declines. Could drop again if will stay trapped below the warning line (WL1) of the descending pitchfork, the upside movement will continue only if the rate will jump and will stabilize above the 0.7324 and above the second warning line (wl2).