The NZD/USD found temporary support and is fighting hard to rebound. Will increase again, only if the USDX will slide further, price is trading right above a critical support, so we need a confirmation that will turn the upside again.
Price reached an important support area, a breakdown will open the door for more declines in the upcoming period, you should wait for a fresh trading opportunity. NZD/USD increased as the USDX looks exhausted already, the index failed to to close above the 93.81 static resistance and near it, signaling a minor drop.
The dollar index decreased as the United States data have come in worse than expected, the PPI and the Unemployment Claims disappointed. The greenback could be saved only by the inflation data, the figures could boost the currency.
The New Zealand FPI dropped by 0.2% in July, has come in worse versus the 0.2% growth in the former reading period, while the Business NZ Manufacturing Index dropped from 56.0 to 55.4 points, signaling a an expansion slowdown. The United States could bring a high volatility in the afternoon, you should be careful because the fundamental factors will drive the price.
Price increased after the false breakdown below the 38.2% retracement level and below the fourth warning line (wl4) of the former ascending pitchfork. Could retest the confluence between the mentioned support levels.
Only a breakdown below the mentioned support level will confirm a further drop towards the 61.8% retracement level, WL2 and towards the fifth warning line (ascending dotted line). We have a major confluence area right above the 0.7053 static support, price could be attracted by this area if the dollar index will have enough energy to jump above the 93.81 level and above the 94.00 psychological level.
However a poor US data will send the rate higher, towards the 23.6% retracement level and towards the 0.7401 static resistance. The major upside target will be at the third warning line (WL3) of the descending pitchfork. Technically is somehow expected to drop further, but we need a confirmation before we take action.