The NZD/USD rallied aggressively again today and erased the last two day’s drop. Is trading in the green as the USDX has dropped and has resumed the yesterday’s bearish candle.  The dollar index has come down, but this could be only a temporary decrease because now is retesting a dynamic support (resistance turned into support). The behavior will change on the USDX if the rate will start to make higher lows, this situation will confirm a reversal on the short term.

The Business NZ Manufacturing Index increased from 55.5 to 57.9 points. On the other hand, the United States data have disappointed again in the afternoon. The USDX has increased a little despite the poor economic data, the Retail Sales have dropped by 0.2% in August,

Price has managed to jump much above the 38.2% retracement level and seems poised to approach and reach the warning line (WL3) of the major descending pitchfork where he could find resistance again. Technically, it could climb much higher after the failure to reach the fifth warning line (wl5) of the ascending pitchfork.

Only a valid breakout will signal a larger increase in the upcoming period, we may have a buying opportunity after a valid breakout.

The current rebound as invalidated the Head and Shoulders pattern. Only a failure to reach the WL3 will send the rate down again. Technically, will jump much above the WL3 if will touch it in the upcoming days.

We’ll see what will happen because the USDX seems undecided, as dropped again since Thursday, but this could be only a minor correction before will jump much higher on the Daily chart. The USD still needs a helping hand from the United States data.