After a very impressive recovery from lows not seen in months, is it time for the New Zealand dollar to resume its bigger picture trend of falling?
There are several signs on the hourly chart that it is possible:
1. An obvious 5-wave decline for the period from Aug 11th to Aug 20th (red)
2. A probable 3-wave correction from Aug 20th bottom. I have marked waves A & C on the chart (blue)
3. Topping, twice, extremely close to the Fibonacci 61.8% for the 5-wave falling sequence. This is my favorite reason to believe that this is a possibility.
However, there are 2 conditions:
A- We need the price to hold on below the Fibonacci level @ 0.6963, or at least below the 71.4% retracement level at 0.6988. A rising move that fail to break above 0.6988 would add to the bearish setup.
B- We need to break below the rising trendline from Asian session low, which is currently running @ 0.6942.
If these 2 conditions are met, NZD could start falling from these levels. In case the price breaks above 0.6988, the bearish setup will be considered void.
A sell order just below 0.6942, with a stop a little above 0.6988 & limit below 0.68 makes perfect sense according to what the hourly chart is telling us.
Good Trading & Good Luck!
Munther Marji CMT
There are several signs on the hourly chart that it is possible:
1. An obvious 5-wave decline for the period from Aug 11th to Aug 20th (red)
2. A probable 3-wave correction from Aug 20th bottom. I have marked waves A & C on the chart (blue)
3. Topping, twice, extremely close to the Fibonacci 61.8% for the 5-wave falling sequence. This is my favorite reason to believe that this is a possibility.
However, there are 2 conditions:
A- We need the price to hold on below the Fibonacci level @ 0.6963, or at least below the 71.4% retracement level at 0.6988. A rising move that fail to break above 0.6988 would add to the bearish setup.
B- We need to break below the rising trendline from Asian session low, which is currently running @ 0.6942.
If these 2 conditions are met, NZD could start falling from these levels. In case the price breaks above 0.6988, the bearish setup will be considered void.
A sell order just below 0.6942, with a stop a little above 0.6988 & limit below 0.68 makes perfect sense according to what the hourly chart is telling us.
Good Trading & Good Luck!
Munther Marji CMT