Elliot Wave Setup Put AUDNZD Bears under PressureAUDNZD bears have been stuck in a consolidation structure for the past three months after a sharp bullish rally that peaked at 1.07301 level on April 17, 2019. The sideways bearish move indicates that the market is in a corrective phase and sooner or later, the bulls will take over and break out the bearish barriers.
Fortunately, a very notable corrective price pattern is in play that is preparing us for the anticipated rally. The pattern is called a triple zigzag or flag pattern; it has a place in both Elliott Wave analysis and conventional technical analysis. The Elliot Wave chart below shows what the market has in store for AUDNZD.
As visible from the chart above, AUDNZD’s advance from March 25 to April 17 took the shape of five-wave Elliot wave impulse pattern. It is labeled (i)-(ii)-(iii)-(iv)-(v).
Elliott Wave Setup AUDNZD for a Notable Reversal
According to the Wave Principle, a three-wave correction in the opposite direction follows every impulse. This is true for AUDNZD, as the bearish move that follows the rally has been unfolding as an Elliot wave triple zigzag pattern, which is almost complete. It’s labeled (w)-(x)-(y)-(x)-(z).
The theory states that once the 5-3 wave cycle is complete, the price heads in the direction of the five-wave sequence. That’s once the wave (z) complete the corrective pattern in play within the blue box on the chart, a bullish rally is expected to resume in wave ((c)).
Wave ((c))’s targets lie above the end of wave ((a)) which makes an advance up to 1.07277 plausible.
Did you like this analysis? Let me know in the comment.
Thanks
Veejahbee.
