NZD/USD plunges at the moment of writing as the Dollar was boosted by the DXY's rally. Fundamentally, the greenback was helped to increase by the ISM Services PMI. The indicator has registered a strong growth to 64.1 from 60.1, exceeding the 60.5 estimates. Its further growth indicates further expansion.
Today, NZD/USD has increased as much as 0.7088 level. The Kiwi has dragged the pair higher as the New Zealand Employment Change and the Unemployment Rate have reported better than expected data.
It remains to see what will really happen as the current decline could be only temporary. As you already know, the US is to release the Unemployment Claims tomorrow, and the NFP, Average Hourly Earnings, and the Unemployment Rate on Friday. Some poor US figures till the end of the week could push the pair higher again.
NZD/USD Upside Was Paused!
NZD/USD has found resistance at the R1 (0.7084) and now is located at 0.7039 below the ascending pitchfork's median line. It's also back below the 38.2% retracement level. The next downside target is seen at the R1 (0.7026).
A minor consolidation above the R1 and below the median line of the ascending pitchfork may signal a new upside movement. The bias is still bullish in the short term, but a larger upside movement could be validated only by a new higher high, if NZD/USD jumps and closes above 0.7088 today's high.
Forecast!
This could still be a temporary decline. NZD/USD could only test and retest the R1 (0.7026) before jumping higher again. Jumping and stabilizing above the ascending pitchfork's median line signals further growth towards the upper median line.
Maybe the 23.6% retracement level is seen as critical support. Dropping below this level could signal that the upside is over and that NZD/USD could go towards new lows.
The material has been provided by InstaForex Company - www.instaforex.com