DanV
Short

NZDUSD - FACES FURTHER WEAKNESS AHEAD

FX:NZDUSD   New Zealand Dollar/U.S. Dollar
In my last published chart of NZDUSD             under the title "Could Kiwi Run or Fly" almost 3 months a go, what appeared to potential falling wedge in fact turned out to be a connector wave X and which broke down with price accelerating to the downside and USD gathering momentum to the upside.

In that post further weakness was not ruled out as at least a retracement was anticipated which did not materialise.

In fact since then price appear to have formed double bottom leading anticipation that we might have ended the bearish cycle.

I would have no problem with that, however looking at the bounce from the last low of 11th March, it appears that wave A is a zigzag, ie 3 swings rather than 5 (normally a sign of corrective move), which is then followed by potentially rising wedge, similar to several USD pair on H4 time frame. This rising wedge (Ending Diagonal) also suggests that the corrective move to the upside could have ended.

Likewise DXY             appears to be forming corrective move to rather than evidence of reversal. If correct then further weakness for Kiwi lies a head.

Though there are many who have switched to bullish side saying that double bottom marks the end of bearish cycle.

Technicals:

1. The bounce of the last low is abc zgzag with wave c being and ending diagonal rising wedge.
2. overall still in down trending channel and bumping against previous support which now could turn into resistance. So far the price seems to have rejected higher prices.
3. Next potential support could be at 50% retracement of the 2009 low to 2011 high is 0.69 (if the 0.7180 zone of double bottom fails to hold).
4. Potential low around 0.69 could be supported by several fib confluence of both retracement and extension.
5. Oh H4 - the MACD has just formed a bearish cross and RSI failing at overbought zone.
6. Weekly RSI still below 50 and could fail to breach it.

See weakly chart for larger picture

Conclusion:

Any Bulls should not give too much room to their long positions as this is a high risk trade.

Traders should see what confirmation they require to consider possible short trade.

Observe the price as it moves to 0.72 in order to get clues about future expectation namely if the previous low would hold and form triple bottom or head to lower zone around 0.69.

As, always please do your own analysis for your requirement. Select to follow me and the charts for notification of any updates. If you like the analysis show this by thumbs up and constructive comments or alternative ideas for all to learn from.

Thanks for taking the time to view my analysis.

DanV
danv-charting.com
DanV MOD
2 years ago
Weekly chart referred to above
snapshot

Reply
Interesting correlation with other NZD and USD pairs...
AUDNZD: potential contrarian setup

NZDUSD: EW update

NZDUSD: Short before NFP

Same exact target. My count is not that crucial, but we both agree it's coming down.
What do you think about AUDNZD? Most people are bearish and suggesting parity...
+1 Reply
DanV MOD IvanLabrie
2 years ago
Hi, yes indeed and thank you for sharing your analysis. I am indeed monitoring the AUDNZD too to see if we have the low in place or will shortly. The falling wedge could still play out though it is little distorted or only partially complete. Not entirely clear yet. However the way I see it from both my AU & NU charts are that both will drop but NU must drop more or faster as both bearish moves develop, if AUDNZD should more significantly higher. I think the low will come later in this cycle.
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DanV MOD
2 years ago
The rising wedge might not be complete yet and could spike into 0.77 or just above. Here is the updated chart
snapshot
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IvanLabrie PRO DanV
2 years ago
Well both eurusd and gbpusd are not falling today it seems. I give it one more day.
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DanV MOD IvanLabrie
2 years ago
Agreed.
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IvanLabrie PRO DanV
2 years ago
We had the wedge completion and price fell as expected, but the decline seems complex, don't you think?
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DanV MOD IvanLabrie
2 years ago
Yes, it is not what we expected. So may be a complex retracement with another attempt to retest the high could follow. This is what I mean
snapshot
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IvanLabrie PRO DanV
2 years ago
Question: can this wedge up be a leading diagonal W1/A in a new move up?
I'm bearish until proven wrong, got a BE stop position running, but not convinced with this drop.
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DanV MOD IvanLabrie
2 years ago
It is unlikely, because we have wave a as zigzag, so wave c would have to have 5 waves as ending diagonal. So if we are to get new retest of the high that would make it possibly expanding diagonal. Similarly, whilst NU is not part of the DXY yet DXY has one more drive up left to conclude the current bullish cycle, that would suggest some weakness for NU.
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IvanLabrie PRO DanV
2 years ago
Indeed, that was take...DXY leg up pending.
We'll see, I'll let the short run and scale in if I see impulsive behavior (on W2).
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IvanLabrie PRO IvanLabrie
2 years ago
*my take
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DanV MOD IvanLabrie
2 years ago
Agreed. I am out for now but will review for re-entry.
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DanV MOD
2 years ago
In case any have missed the updated chart earlier today here is the link
NZDUSD - FACES FURTHER WEAKNESS AHEAD - UPDATE
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