The above puts EURNZD's entire 2-month sell-off in 2018 and the 10-months recovery in an context. The pair’s decline can easily be seen as a five-wave impulse. The pattern is labeled 1-2-3-4-5, wave 3 is the longest among the three impulse waves.
The recovery looks like a textbook W-X-Y-X-Z triple three corrections. Waves W unfolded as an expanded flat pattern while wave X, Y, X, and Z can both be labeled as simple (a)-(b)-(c) zigzags.
Once a correction is over, the larger trend resumes. Here, a sharp selloff from 1.79282 in October 2018 precedes the above-shown corrective recovery, so the larger trend is down. Also, note how the , , and 78.6% Fibonacci level discouraged the bulls in wave Z. This is another indication that the entire 5-3 wave cycle is complete. If this count is correct, last week's reversal is the start of a major plunge, whose targets lie beneath 1.63323 in the long term.
In my opinion, selling the rallies is a viable strategy as long as EURNZD trades below 1.76993 invalidation level. Instead of giving in to complacency, the bulls should take last week’s reversal very seriously.
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