The NZD/USD has decreased in the latest days as the price has found strong resistance, the pair has also fallen because the US dollar index is consolidating after the last massive drop. The price continues to trade in a familiar range as the price has failed to jump and consolidate above the sideways movement resistance, the Kiwi has retreated a little as the bulls weren’t strong enough to consolidate the latest gains. We could see a broader correction phase on the medium term only if the price will have enough energy to breakout from this extended range.
You can notice on the Weekly chart that the price is moving sideways between the 61.8% and the 50% retracement level and could start an important rebound if will jump and consolidate above the 50% retracement level. The NZD/USD has found strong support right below the 61.8% retracement level, somewhere at the 0.6255 level, has bounced from the lows and now is pressuring the sideways movement resistance. The Kiwi has taken advantage of the USD’s slump, the pair could increase in the coming period if the US dollar index will decline further.
The US dollar remains weak as the economic data didn’t support the greenback, the dovish FOMC minutes have disappointed the currency traders, the FED has maintained the rate on hold in March and is less likely to see a hike in this summer because the FED is very cautious. The Federal Reserve has promised that will increase the rate several times in 2016, but I’m afraid that is not sustainable right now. The greenback has posted humble gains in yesterday’s trading session after the US Unemployment Claims were released, the initial claims have decreased from 276K to 267K jobs in late week
The price is moving upward inside of an ascending channel, is trapped between the lower median line (lml) and the first warning line (wl1) of the short term ascending pitchfork, the pair has found strong resistance right above the lower median line and now could drop to retest the warning line. The NZD/USD has failed to stay above the lower median line and above the 50% retracement level after the last breakout attempt, the price could increase further and jump above the 50% retracement level even if will stay below the lower median line (lml). The pair will become strongly bullish only if will jump and stay inside of the ascending pitchfork’s body, above the lower median line. Personally, I’d prefer to see the price lower, because he needs to regain strength to be able to escape from the sideways movement.
The price has tried to retest the 50% retracement level, but has closed much below this obstacle, the pair could drop further and close below the Tuesday’s low from 0.6757 level. The pair will be driven today by technical factors because we don’t have significant economic events from the US or New Zealand, the price could drop as the US dollar index looks determined to climb higher.