The NZD/USD increased a little today and erased the morning losses, but it is still under selling pressure and could drop much deeper in the upcoming period. The rate has failed to reach a dynamic resistance signaling that the bulls are too exhausted on the short term. Price also failed to make new highs signaling a corrective phase on the daily chart.

We’ll see what will really happen later as the US and New Zealand are to release high impact data, the fundamental factors will take the lead, so you should be careful not to suffer a heavy loss.

Price decreased in the last days, but we still need a confirmation that it will drop much deeper in the upcoming days. NZD/USD has turned to the downside on the short term, but the fundamental events could send it higher again.

The New Zealand Retail Sales are expected to increase by 1.4% in the fourth quarter, more versus the 0.2% growth in the former reading period, while the Core Retail Sales could increase by 0.7%, more versus the 0.5% in the third quarter. The US Unemployment Claims are expected to remain on hold at 230K jobs in the previous week, while the CB Leading Index could increase by 0.7%, more versus the 0.6% in December.

You can see that the rate failed to reach and retest the warning line (wl1) of the ascending pitchfork and now goes down to find demand again. Price made a false breakout above the upper median line (uml) of the ascending pitchfork in the yesterday’s session signaling a selling pressure.

It has also failed to retest the upper median line (uml) of the descending pitchfork and now could be attracted by the median line (ml) of the ascending pitchfork and by the median line (ml) of the descending pitchfork. A valid breakdown below the mentioned support levels will confirm a further drop.