NZDUSD is being resisted at the 0.6850-0.6825 zone. How far will price drop? The following 10 July NZDUSD Elliott wave analysis gives technical insights based on Elliott wave theory.
The Kiwi ended last week as the best performing among the major pairs with about 130 Pips rally from 0.6685. Price ended a bearish impulse wave which started in April. According to Elliott wave theory, a 3-wave correction in the opposite direction (bullish in this case) should follow the end of an impulse wave. We had a reversal zone in mind. Price got close to the base of our reversal zone at 0.6683 and was supported. It rallied afterwards just as expected. In the last update, we identified a resistance zone and expected the first bullish swing from the 0.6683 base to end there before a bearish correction follows. Is that happening now? Let’s review the last update where the chart below was used.
Price advanced above 0.66775 to establish the start of the bullish correction. The bullish move could continue far above 0.7060. Price has currently hit a resistance zone which could make the end of wave (i) of (A). The resistance might be a temporary barrier forcing price back to the support zone. Wave (ii) could end at 0.6768 just around 0.6775 before the bullish move continues. Wave (A) target is set at 0.7060 before price drops for a much bigger bearish correction- wave (B).
10 July NZDUSD Elliott wave analysis: what next?
The drop started as expected, breaking below the 0.6824 lower boundary. A 3-wave correction should be seen coming deeper. We will wait and see if the drop is corrective in order to be more confident about the next rally. An impulsive wave (A) is expected to make way up to 0.7060. We should watch price activities between 0.6748 and 0.6768 intraday Fib-ratio levels. In the next update, we look at this closely. A fast drop below 0.6683, though less likely, would invalidate this forecast and set prices lower.
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