NZD performed better than other major currencies last week. What should we expect this week? The following 9 July NZDUSD Elliott wave analysis gives useful insights based on Elliott wave theory.
NZDUSD was supported last week at 0.6680 before it pushed upside, out of the 0.6775-0.6683 support zone. It rallied further after the last NFP reports. We had, in the past updates, expected this. NZDUSD completed a clear bearish impulse wave. According to Elliott wave theory, an impulse wave is followed by a corrective wave pattern in the opposite direction. The NZDUSD impulse wave was a textbook wave pattern. The 5th wave also came as an impulse wave. At the end, it all made sense to expect that price would rally after hitting the reversal zone. It did and NZDUSD performed better than other major pairs. The chart below was used in the last update.
Price is gradually making a new bottom just between 0.6775 and 0.6683 reversal zone. There is a possibility of a head and shoulder pattern as we count an impulse wave (A) upside. If price moves as expected, we should expect it at 0.7060 at least. This forecast will be invalid if price breaks below 0.6683.
The Kiwi broke above 0.6775 up to 0.6850. What next? The chart below shows what could happen next.
9 July NZDUSD Elliott wave analysis: what next?
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). We will see how this plays out in the coming days.
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