Our NZDUSD forecast sees the pair slip after failing to take out the immediate upside obstacles. Now it is trading in the red at 0.7009 as the DXY rallies.
Still, this might only be a temporary decline after the recent rally. Technically, a temporary decline was to some extent expected, so the pair could come back down to retest the buyers.
The US ISM Services PMI dropped unexpectedly lower from 64.0 to 60.1 points, below 63.4 estimates. Also, the Final Services PMI dropped from 64.8 to 64.6 points, even if the specialists had expected the indicator to remain steady at 64.8 points.
The FOMC Meeting Minutes is seen as a high-impact event tomorrow. The US Dollar could dominate the currency market if the report indicates potential rate hikes. The volatility could be high around this event, so forex traders should be careful.
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NZDUSD forecast and technical analysis – sell-off potential in short term
NZD/USD plunges and is now almost at the lower median line (lml) of the ascending pitchfork. The pair has found strong resistance right above the weekly R1 (0.7095) level. Failing to stabilize above the ascending pitchfork’s median line signalled a potential sell-off in the short term.
Stabilizing under the downtrend line could signal that the pair could register a larger drop. DXY’s further growth should push the pair towards fresh new lows. On the other hand, coming back above the downtrend line and staying within the ascending pitchfork’s body could indicate potential growth.
The lower median line (LML) of the ascending pitchfork is seen as a dynamic support. A bullish pattern printed on this line could bring us a new long opportunity, buying signal. Escaping from the minor ascending pitchfork’s body and dropping below the weekly S1 (0.6956) could validate a deeper drop to come.
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