NZD/USD increased as much as 0.6921 today where it has found strong supply and now is traded lower at 0.6895. The price has registered a false breakout through an upside obstacle, so the rebound could be complete.
The pair rallied as the Dollar Index has turned to the downside today. DXY's decline was natural after its amazing leg higher. Fundamentally, the New Zealand Building Consents rose by 3.8% versus 2.2% in the previous reporting period, while the ANZ Business Confidence was reported -7.2 points below -6.8 in the previous reporting period.
The NZD/USD is fighting hard to rebound as the US Unemployment Claims increased from 351K to 362K. The economists have expected to see a drop to 333K. The Chicago PMI was reported at 64.7 below 64.9 expected.
The Dollar Index is into a temporary corrective phase. The greenback could lose more ground versus its rivals even if the US Final GDP increased by 6.7% versus only a 6.6% expected.
NZD/USD False Breakout!
The NZD/USD pair dropped as much as 0.6859 in yesterday's session but it has failed to reach the descending pitchfork's median line (ml) which is seen as a potential target. Technically, the pair was expected to drop after registering only false breakouts through the descending pitchfork's upper median line (uml). In the short term, a temporary rebound was natural after the most recent sell-off.
The rebound could help us to catch new downside movements. Maybe, the NZD/USD pair could still approach and reach the median line despite the current rebound.
NZD/USD Forecast!
NZD/USD could drop again after the current rebound. We cannot talk about a larger rebound as long as the price action didn't develop a major bullish pattern. Techncially, the pressure is high as long as the pair stays under the upside 50% Fibonacci line.
A broader downside movement could be confirmed by a valid breakdown below the median line (ml).
The material has been provided by InstaForex Company - www.instaforex.com