NZDUSD short term Elliott Wave view suggests that the decline to 0.715 low on March 21 ended Primary wave ((2)). Primary Wave ((3)) is in progress as a 5 waves where wave 1 of ((3)) is unfolding as a 5 waves diagonal Elliott Wave structure. A 5 waves diagonal is different than 5 waves impulse in that the subdivision of wave 1, 3, and 5 in diagonal is in 3 waves, instead of 5 waves in impulse. Up from 0.715 low, Minute wave ((i)) ended at 0.7303, Minute wave ((ii)) ended at 0.7184, Minute wave ((iii)) ended at 0.7322, and Minute wave ((iv)) ended at 0.7239.

In the case of NZDUSD, we can see the internal of Minute wave ((i)), ((iii)), and ((v)) have subdivision of 3 waves. For example, the internal of Minute wave ((i)) unfolded as a 3 waves corrective Elliott Wave structure called zigzag where Minutte wave (a) ended at 0.7263, Minutte wave (b) ended at 0.72, and Minutte wave (c) of ((i)) ended at 0.7303.  The internal of Minute wave ((iii)) also unfolded as 3 waves corrective Elliott Wave structure called a Flat. Up from 0.7303, Minutte wave (a) ended at 0.7248, Minutte wave (b) ended at 0.7193, and Minutte wave (c) of ((iii)) ended at 0.7322. Finally, internal of Minute wave ((v)) also unfolded in 3 waves where Minutte wave (w) ended at 0.7305, Minutte wave (x) ended at 0.7275, and Minutte wave (y) of ((v)) is in progress to 0.734 – 0.735.

Once pair reaches 0.734 – 0.7357, it should complete Minor wave 1 diagonal and end cycle from 3.21.2018 low (0.715). Pair should then pullback in Minor wave 2 in 3, 7, or 11 swing to correct cycle from 3.21.2018 low before the rally resumes. We don’t like selling the pair and expect Minor wave 2 decline in the pair to find buyers in 3, 7, or 11 swing as far as pivot at 0.715 stays intact.

NZDUSD Elliott Wave 1 Hour Chart

 

NZDUSD has been in a strong up trend since 11/17/2017 (0.6776) low. Pair has gained 7.7% since then advancing from a low of 0.6776 to a high of 0.7331 before backing off a bit from the highs. Advance from 0.6776 low is unfolding as an Impulse where blue wave (1) ended at 0.6945, blue wave (2) pull back completed at 0.6815, red wave 1 of (3) completed at 0.6912, dip to 0.6820 was red wave 2 of (3) which was followed by an extended red wave 3. Within the extended red wave 3, rally to 0.7028 was wave ((i)), dip to 0.6951 completed wave ((ii)), advance to 0.7276 was wave ((iii)), dip to 0.7217 was wave ((iv)) while the peak at 0.7314 completed the extended red wave 3. Then we saw a 3 waves pull back to 0.7231, a new high to 0.7731 followed by a sharp 5 waves decline to 0.7244. We are favoring this price action to be a running FLAT wave 4 and favouring another high above 0.7731 to complete blue wave (3). Once blue wave (3) is completed, we would expect a pull back in blue wave (4) to correct the cycle from 0.6815 (11/30/2017) low in 3-7-11 swings and then another high in blue wave (5) to complete a 5 waves Impulsive advance from 0.6776 low. According to Elliott Wave Theory, after a 5 waves advance, there should be a pull back to correct 5 waves advance and this pull back should unfold in 3-7-11 swings and correct cycle from 11/17/2017 (0.6776) low. The Right side is the upside so we don’t like to sell NZDUSD pair as that would be a counter-trend trade and we expect buyers to appear in the dips in 3-7-11 during wave (4) pull back and then later on during proposed wave ((2)) pull back.

NZDUSD 4 Hour Elliott Wave Analysis 1.18.2018

NZDUSD 4 Hour Elliott Wave Analysis (Alternate view)

If NZDUSD pair fails to make a new high from current levels and drops below 0.7244, then pair should already be in blue wave (4) pull back which should ideally complete between 0.7233 – 0.71783 area and then we would expect the pair to turn up again in blue wave (5) or bounce in 3 waves and then turn lower again to do 7 swings within blue wave (4) pull back. If pair follows this path, then we expect buyers to appear between 0.7233 – 0.71783 area for a 3 waves bounce at least.