The NZD/USD dropped more than 130 pips and reached fresh new lows. The Kiwi lost significant ground versus the greenback even if the Dollar index has decreased as well. The pair dropped and resumed the yesterday’s minor bearish candle, technically it was expected to drop a little but not so heavy.

Price dropped much below the 0.7055 previous low, but remains to see if this it was a valid breakdown, or the will be a false one. NZD/USD is on a declining path on the Daily chart, is trapped within a descending channel, so it could drop much deeper as long as will stay within the pattern’s body.

Technically, it was somehow expected to develop a Falling Wedge pattern, but the today’s drop could invalidate it.

The NZD/USD plunged since the Asian session and stayed lower as the US dollar has received a helping hand from the Unemployment Claims, which was reported at 222K in the previous week, much below the 240K estimate and versus the 244K in  the former reading period. Moreover, the Philly Fed Manufacturing Index increased from 23.8 to 27.9 points, exceeding the 21.9 estimate, while the CB Leading Index dropped by 0.2% in the previous month, even if the traders have expected to see a 0.1% growth.

You can see on the daily chart that the rate has dropped aggressively and erased the last week’s gains, a valid breakdown below the 0.7053 static support will confirm a further drop in the upcoming period, We may have a  selling opportunity if the rate will retest the broken static support.

Technically, it is expected to drop towards the second warning line (WL2) of the former descending pitchfork. The current drop is natural and it was somehow expected after the retest of the fifth warning line (wl5) and after the failure to close on this line and above the 50% Fibonacci retracement level. The perspective remains bearish as long as the rate stay below the WL3 of the descending pitchfork.