NZD/USD ? Bullish Medium-Term Outlook ?

3 min read
HubertM

HubertM

Author

Dear Traders,

The NZD/USD is showing a potentially very bullish price structure for the coming months. New long-term highs could be set in the process.

This analysis will look at the bigger picture of this currency pair.

Bears Beware…

I had previously posted NZD/USD analyses that were painting a bearish picture in the medium-term. This is no longer my view and previous posts for the NZD/USD should therefore be disregarded.

The monthly chart (above) suggests that a long-term ending diagonal as wave C is the most likely suspect for the price action of the last 2 decades, which forms the final part of a downtrend correction, which ended in the mid 80s. This means that price could be in the final stages of this diagonal (Black C), i.e. Wave C (pink) of 5 (orange).

The weekly chart below indicates that the extensive range we have witnessed, since 2016 up until now, is probably an expanding triangle which forms wave b of 5. The strong bullish impulse which kicked off in late 2017 would then form Wave 1 (orange) of C (pink) of 5 (white). It means that price should catapult out of the range to the upside with significant force in the near future.

Timing

As for when this might happen exactly… there are two possible scenarios (see 3rd chart, below):

Scenario 1 (white line): It could be that Wave 1 and 2 (orange) are already complete, with wave 2 having been a flat correction. The bullish momentum since the low of Mar 1 makes this a realistic option. Price has to continue to push up hard and fast from here if this scenario is correct.

Scenario 2 (black lines): Here i present the option that the bullish push since Mar 1 is still Wave 5 of 1, which would make a minor higher high relative to the Jan and Feb high points, before correcting down sharply for Wave 2.

Both options suggests bullish momentum in the short-term… the question is more how far it can go in this current swing.

 

All the best along your trading journey

Hubert

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