NZD/USD Elliott Wave: Kiwi kicks into gear
|Executive summary
- NZD/USD declines in an ending diagonal pattern.
- We anticipate support to develop and drive the exchange rate up to .6100.
- Prices need to hold above .5485 for this bullish view to remain valid.
Elliott Wave analysis
NZD/USD has been declining in choppy and overlapping waves since the July 1 high.
The Elliott wave pattern we are following is that NZD/USD is in the late stages of an expanded flat pattern labeled a-b-c. Wave ‘c’ of the pattern appears to be carving as an ending diagonal.
Ending diagonal’s are Elliott wave structures that appear like wedges, in this case a falling wedge.
There may be one more dip to finalize the pattern. Once the 5-waves from the diagonal are in place, then a booming rally is forecasted to carry NZD/USD up to the origination of the pattern near .6100.
Bottom line
The trend lower for NZD/USD appears to be nearing the end of the correction that began in April. Once a rally begins, we anticipate a trend up to and exceeding .6100.
If .5485 support is broken to the downside, then we’ll consider alternate wave patterns.
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