The currency pair is trading in the red again after a minor increase, the today’s gains have vanished as the USD has received support from the United States New Home Sales report, which has come in better than expected.

The greenback has registered some gains in the last hours as the US dollar index has increased a little, but the index remains under selling pressure and could resume the bearish movement anytime. The USDX has found strong support at the 99.55 in the yesterday’s trading session, we could have a bounce back if the rate will stabilize above this level.

Remains to see if the USDX correction phase has ended, we still need a confirmation in the coming days, personally I believe that some good data from the US could send the index higher in the coming days, a throwback is somehow expected after the massive drop. We have to be patient to see what will happen later, after the New Zealand Trade Balance wil be released, the indicator could increase significantly from -285M to 160M, this could be the highest trade surplus since June 2016, the Kiwi could increase again if the surplus will be higher than expected.

The rate looks too overbought on the short term to stay higher after the several false breakout above the 0.7053 static resistance and above the 61.8% retracement level, today has retested the 0.7053 level and now is pressuring the third warning line (wl3). I’ve said in the last two articles that we may have a selling opportunity if the rate will come to test the confluence area formed at the intersection between the 150% Fibonacci line (descending dotted line) with the warning line (wl3) and with the 0.7053 static resistance.

Remains to see what will happen, because a breakout above the mentioned resistance will accelerate the upside movement, right now is important to see what will happen on the USDX, a good US data tomorrow will send the USDX higher, the greenback will rebound and will recover as well if this scenario will take shape.