NZD/USD increased a little today, but the outlook is still bearish as the USD is still very strong these days. The price is into a corrective phase and we don't have any signal that this downside movement is completed.
So, the bias remains bearish even if the price makes a minor rebound, somehow expected after the aggressive drop. NZD/USD could come back to test and retest some resistance levels before it resumes the bearish movement.
NZD/USD plunged below the 50% Fibonacci retracement level after the price has ignored the dynamic support represented by the lower median line (lm) of the minor ascending pitchfork. Technically, the next downside target is seen at the 61.8% retracement level, it could approach this downside obstacle as long as the price is trading below the 50% level and below the sliding parallel line (SL) of the major descending pitchfork.
Unfortunately, the price has failed to reach the upper median line (uml) of the ascending pitchfork and the 0.6789 high, so the current drop is natural. It remains to see how long this correction will be because NZD/USD is trapped below some important resistance levels.
NZD/USD should drop further as long as it is trading below the SL, SL1 and below the 38.2% retracement level. Still, only a valid breakdown below the 61.8% retracement level will confirm a drop towards the 0.6268 static support and towards the median line (ML) of the descending pitchfork.
A rejection (false breakout, bearish engulfing) from the 50% retracement level will announce a larger corrective phase on the Daily chart. New Zealand Employment Change and Unemployment Rate indicators could bring high volatility later today, some poor numbers will pressure the NZD.
