NZD/USD reached new highs and looks determined to approach new highs as the USD is weakened by the USDX’s drop. I’ve said in the previous week that we may have a minor decrease on the USDX after several false breakouts above the 93.81 level. The pair is pressuring an important static resistance right now, so only a valid breakout will confirm a further increase.

Unfortunately for the USD, the dollar index dropped sharply and resumed the Friday’s bearish candle. The index could drop much deeper in the upcoming days, could approach and reach the 92.55 swing low, a drop below it will open the door for more declines. I’ve said in the previous weeks that we may have a sideways movement above the 92.49 major static support before the rate will really start a reversal.

The NZD increased on the mixed New Zealand data, the Visitor Arrivals dropped by -5.3% in July versus a 4.9% growth in the former reading period, while the Credit Card Spending rose by 7.2% in the previous month, but less versus the 8.3% growth in June. The USD could be saved only by the US data right now.

Price climbed above the fourth warning line (wl4) of the former ascending pitchfork, but is still facing a tough resistance. We have a major static resistance at the 0.7324 static resistance. You can notice that we had several false breakouts above the mentioned horizontal resistance, another false breakout will send the rate down again. Right now is better to stay away to see what will happen and to wait for a fresh trading signal, we don’t have any trading opportunity at this moment. We could go short again if the rate will stay below the warning line (wl4) and below the 0.7324 static resistance.

Will increase further if will close above the horizontal resistance and if will retest the fourth warning line (wl4) of the former ascending pitchfork. Technically, we may have a Head and Shoulders pattern, but this will be confirmed only if the price will close somewhere below the 0.7222 previous low.