Description
The NZDUSD prices develop an incomplete corrective formation that suggests a new decline, which could complete a three-wave movement in the following trading sessions.
In its 4-hour chart, the kiwi illustrates a bearish move that the price started when topped at 0.67978, starting a corrective structure that remains in progress. The figure highlights the completion of waves A and B labeled in green. According to the Elliott wave theory, the NZDUSD pair should start to develop a downward wave C subdivided into five waves from its corrective sequence. In this context, the price could drop at least at 0.65165, which corresponds to the September 24th low.
On the other hand, from the chartist perspective, the last decline looks like a three descending peaks pattern, which suggests the continuation of the primary bearish move supporting the scenario of further falls.
The bearish scenario’s invalidation level locates above 0.6670, which coincides with the surpassing of the short-term bearish trendline identified in brown.
Chart
Trading Plan Summary
- Entry Level: 0.66068
- Protective Stop: 0.66648
- Profit Target: 0.65318
- Risk/Reward Ratio: 1.29
- Position Size: 0.01 lot per $1,000 in trading account.
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