The AUD/NZD has created an important bullish turn-around. This changes the medium-term outlook potentially. Today’s analysis will review the AUD/NZD price structure.
In a previous analysis of the AUD/NZD, i had highlighted the possibility for a bearish impulse to unfold which could take the pair close to parity. Bearish momentum did indeed occur but the recent bullish u-turn of the last weeks happened too soon, which changes the overall picture.
the bullish u-turn (at the price level at which it occurred) suggests that the entire downward move since Oct 2017 is more likely a correction, instead of the final impulse within a large wave B flat pattern. The new scenario suggests that the bullish move, which preceded the correction, could be seen as a leading expanding diagonal, instead of a complex zigzag. In any case, given that the very large upswing during 2015 was most likely an impulse, we should expect another major bout of bullish momentum setting in during wave C or 3 (yellow), taking price above 1.1670. The latest price-action simply suggests that this upwards swing may have started a bit earlier than expected.
If the leading diagonal scenario is correct, it would hint strongly at a new major bull trend, rather than just a bullish zigzag. In any case, the odds are now heavily shifting towards upside continuation. As long as we continue to see corrective structure to the downside and impulsive structures to the upside from here on, dip buying could be very lucrative up to 1.1670.
All the best along your trading journey