The NZD/USD has increased significantly in the last days and looks determined to climb toward new peaks, the pair is finally poised to start a broader rebound as the price has escaped from the extended sideways movement, we still need confirmation but the price looks strongly bullish on the short term. The US dollar is moving down again as the US dollar index plunges on the short term, the index has rebounded in the last week but wasn’t able to pressure a major dynamic resistance and now is seeking for strong support to stop the current bearish momentum.
The Kiwi edges higher as the New Zealand Consumer Price Index has increased unexpectedly higher in Q1, the CPI rose by 0.2%, exceeding the 0.1% estimate, the economic indicator has increased sharply compared to the 0.5% drop from the last reading period. The greenback was weakened again by the US poor economic figures, the USDX could approach the major swing low from 93.61 level.
The price has finally broken above the lower median line (LML) of the ascending pitchfork, the pair will become strongly bullish if will stabilize inside of the ascending pitchfork’s body. The pair is trading much above the 50% retracement level, the price has retest this support level (resistance turned into resistance) and now edges higher. The NZD/USD has finally started a broader rebound, the price has escaped from the extended range formed between the 61.8% and the 50% retracement level, the next upside target at the median line of the ascending pitchfork and higher at the 38.2% retracement level. The currency pair has found strong support right below the 61.8% retracement level, everyone is wondering if the correction phase has ended because the price wasn’t able to stay below the 61.8% level too long, the buyers have taken the lead, the price has consolidated in the last months and now looks ready to climb much higher as the USD remains under selling pressure.
The US is to release the Building Permits and the Housing Starts data, remains to see how the NZD/USD will react after the reports will be published by the Census Bureau. The Building Permits may increase from 1.18M to 1.20M in March, but I don’t think that will have the power to move the greenback higher versus its counterparts. Moreover the Housing Starts could drop from 1.18M to 1.17M in March, the indicator could drop again after one month increase.
The price edges higher and has ignored the horizontal resistance from the 0.6965, personally I would like to see the lower median line (LML) retest before the price will jump higher, the bullish momentum could find temporary resistance at the 50% Fibonacci line (ascending dotted line).
I’ve drawn a short ascending pitchfork on the H1 chart to show you better the bullish momentum, the pair is moving upward inside of the pitchfork’s body and the price has become strongly bullish because has managed to jump and close above the median line (ml), the short term target is at the upper median line (uml) of the ascending pitchfork.