18 July NZDUSD Elliott wave analysis

NZDUSD closed yesterday on a bearish mood after a bullish start. The following 18 July NZDUSD Elliott wave analysis looks at what should be expected next based on Elliott wave theory.

The Dollar rallied yesterday sent NZDUSD down after a very impressive bullish breakout in the Asian session. In the last update, we expected the rally to break above the 0.6824-0.6850 intraday resistance zone. Price hit the zone but was resisted again. The dip from this zone has been termed the 2nd wave of an impulsive wave (A) of a prospective bullish zigzag. Wave (A) was expected to extend to 0.7060 if the intraday resistance zone is broken upside. The chart below was used in the last update.

The bullish breakout we discussed in the last update is now even more significant. Price has rallied to the intraday support zone as expected and at break upside, we should see price advancing even further. 0.7060 still stands as the ultimate bullish target for the end of wave (A) if price moves as expected. Unless in a case of sudden break below 0.6720, the forecast is much likely to happen

With the dip getting close to 0.6720, we might have a 3-wave dip below it to complete wave (ii) as the chart below forecasts.

18 July NZDUSD Elliott wave analysis: what next?

Is price going lower than 0.6720 to complete wave (ii) with a zigzag corrective pattern? Price is expected to stay above 0.6680 and then break above the 0.6824-0.6850 resistance. The real battle seem to be between these two price levels. If price breaks below 0.6680, the bearish trend should continue. The preferred scenario is shown in the chart above. If price successfully breaks above the resistance zone, we can look forward to 0.7060. Stay tuned for the next update.

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