NZD/USD ? Bullish Correction is Due ??

3 min read
HubertM

HubertM

Author

Dear Traders,

The NZD/USD has continued downwards on a slow grind, but is looking exhausted now. Today’s analysis will provide an update on the NZD/USD wave structure.

Bearish Impulse Looks Exhausted

The Bearish move since Apr 13 is now virtually complete. There may be one sub-wave left to complete. So a final, mild, lower low is possible.

Overall the corrective structure since Feb 16 is probably turning into a double zigzag, rather than a flat. The swing between Mar 21 – Apr 13 did not retrace swing from Feb 16 – Mar 21 far enough to make a flat pattern likely. The double zigzag scenario will require a bullish correction next, followed by another bearish motive wave. zigzags can appear in many shapes and sizes, so it is difficult to predict exact levels for swings b and c within (turquoise Y). The yellow price path in the charts above is only roughly indicative. The main requirement is that price remains above 0.6780 (the start of Orange wave 1). In addition, we want to see bullish corrective price-action that really disrupts the current downward flow, such that an overall ABC structure becomes confirmed, rather than a 1-2-3.

This pair is therefore trading at very interesting levels, which could offer high reward-to-risk ratio entries for the medium-term. Subject to the longer-term analysis being correct, we are currently hovering at levels that are close to the end of orange wave 2/start of orange wave 3. Beginning the process of building up long positions, either now or after another B-C (as described above), has significant appeal.

0.6780 is the crucial level that must not be crossed to the downside anymore.

All the best along your trading journey

Hubert

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