NZD/USD is trading in the red at 0.7098 level and it should approach 0.7000 psychological level after making a new lower low. Technically, the pair is expected to resume its corrective phase in the short term if the US Dollar Index resumes its rebound.
USD appreciates versus its rivals despite poor data reported by the retails sales indicators on Friday. The greenback was boosted by the Capacity Utilization Rate and by the Industrial Production, these economic indicators have come in better than expected.
NZD/USD Correction Activated!
If you remember from my analysis, NZD/USD should drop deeper if it closes below the median line (ML) of the descending pitchfork. The bearish reversal was activated after the price's valid breakdown through the median line (ML).
As you can see on the H4 chart, NZD/USD has escaped from the major up channel signaling a corrective phase. It has also developed and confirmed the minor Head & Shoulders reversal pattern, so a further drop is natural.
Trading Tips!
The last bearish candle confirmed the sell-off and suggests selling with a first downside target at the 0.7000 level. The lower median line (LML) and the S3 (0.6960) could attract the price as long as it stays below the median line (ML).
