NZD/USD failed to stabilize above the 0.71 - 0.7150 area signaling that the swing higher is over and that a corrective phase could develop soon. The next few days could be decisive, a new lower low, drop below 0.7000 psychological level could really announce a downside momentum.
USD could take full control if the US Dollar Index starts a bullish reversal. USDX has shown some oversold signals but we still need more than this before considering going long on USD again.
NZD/USD Corrective Phase Needs Confirmation!
NZD/USD has retested the third warning line (wl3) and now has dropped under the S1 (0.7068) level. Dropping below the S2 (0.7001) level could confirm a deeper drop in the short term.
Its failure to approach the 0.7171 former high in the last attempt signals exhausted buyers. The outlook remains bullish despite the current drop as long it stays above 0.7005 static support.
Coming back and stabilizing above 0.7100 psychological level could offer us a new long opportunity.
NZD/USD FORECAST:
Sell a bearish closure under the 0.7000 psychological level and use the 0.68 level as a downside target.
Buy a bullish closure above the Pivot Point (0.7120) level suggests buying as NZD/USD may resume its uptrend.
