NZD/USD dropped in the short term but this could be only a temporary decline. It has retested the weekly pivot of (0.7228) and now is trying to grow again. The bias is still bullish as the rate stands far above the immediate uptrend line.
The New Zealand PPI Input and PPI Output have reported better than expected data earlier signaling that the Kiwi may resume its growth. The USD is bearish as long as the US Dollar Index continues to drop.
It remains to see how the pair will react after the FOMC Meeting Minutes will be released tonight.
NZD/USD Retests The Buyers!
NZD/USD plunged after registering only a false breakout above the 61.8% retracement level. Now is pressuring the weekly 0.7228 level, closing below it could signal a deeper decline towards the 50% Fibonacci level and down to the immediate uptrend line.
Registering only a false breakdown through the weekly pivot could signal new bullish momentum. The bullish scenario could be invalidated if the pair will make a valid breakdown through the uptrend line.
The major resistance is seen at the upper median line (UML) of the ascending pitchfork. A valid breakout above 61.8% could indicate an upside breakout above this dynamic resistance as well.
Outlook!
A false breakdown through the weekly pivot (0.7228) or below the uptrend line could bring a new buying opportunity. The confluence area formed at the intersection between the uptrend and the 50% represents a strong support zone.
Any bullish reversal signal printed around the confleunce area could attract the buyers which will lead the rate higher towards 61.8% and up to the upper median line (UML).
Only a valid breakdown below 0.72 and through the uptrend may signal a larger decline towards the median line (ML).
The material has been provided by InstaForex Company - www.instaforex.com