NZD/USD focuses on correction right now and could drop much deeper if the USDX will resume the minor rebound. Price looks undecided right now, has squeezed in the last hours and has erased the earlier losses. Could decrease further as is still under selling pressure on the short term, is seeking for strong support and could find one very soon.
Price dropped as much as 0.7308 level on Wednesday, you should be careful because the fundamental factors will take the lead again. Technically is expected to drop further and I believe that only the fundamental factors could turn the price to the upside.
As already know, the Reserve Bank of New Zealand will publish the Official Cash Rate, which is expected to remain unchanged at 1.75%. The interest rate remains steady since since November 2016, when was decreased for the last time by 0.25%.
The RBNZ Rate Statement and the RBNZ Press Conference could bring a high volatility on the NZD/USD.
Price goes down and could reach and retest the fourth warning line (wl4) of the former ascending pitchfork. I’ve said in the previous articles that the perspective remains somehow bullish on the Daily chart as long as the rate stays above the warning line (wl4).
The correction is natural after the rejection from the confluence between the WL3 with the third warning line (wl3). A dovish RNZD will punish the Kiwi, which will depreciate versus all its rivals.
Only a valid breakdown will signal a major drop and a reversal because the current drop could be only temporary.
