The NZD/USD dropped on Friday and erased the Thursday’s gains. Price has found temporary resistance as the USD was pushed higher by the USDX’s minor increase.

The pair moves somehow sideways on the Daily chart, so maybe will be better to stay away for now because we don’t have a clear direction on the short term. It remains to see what will happen because a failure to make new highs and to jump above the near term resistance levels will signal an exhaustion and a potential drop.

USDX’s next move will show us what will happen with the USD on the short term. The dollar index is moving in range right now but maintains a bearish perspective.

The USDX failed to stay above the first warning line (wl1) of the minor ascending pitchfork. It has failed to reach and retest the median line (ML) of the major black descending pitchfork and the sliding line (sl) of the dark blue ascending pitchfork.

You can see on the daily chart that the rate stays above the second warning line (wl2) of the ascending pitchfork, so only a breakdown will confirm a  drop at least till the lower median line (lml) of the major ascending pitchfork. I’ve said in the previous week that the index could take out the support from the lower median line (lml) and could drop further. This scenario will force the USD to lose more ground versus its rivals.

The rate dropped and failed to reach and retest the median line (ml) of the ascending pitchfork. It is expected to drop and to pressure the lower median line (lml) in the upcoming days. We may have a buying opportunity if the rate will make a valid breakout above the 0.7401 static resistance. A selling opportunity will appear if the rate will make a valid breakdown below the outside sliding line (sl).