NZDUSD Drops Through 0.6500 Handle

25 September 2020

NZDUSD has dropped through 0.6500/10 mark, almost 300 pips lower from 0.6800 highs this month. The currency might be preparing to produce a counter trend rally before bears are back in control. They would be inclined to push lower towards 0.6300 and 0.5950 levels respectively.

NZDUSD probable wave counts are as follows: The currency had dropped through 0.5470 around March this year. Bulls had taken control since then and managed to carve a religious rally towards 0.6800 levels. It was clearly sub-divided into 5 waves, making an impulse.

Ideally, an impulse is followed by a corrective wave in the opposite direction. The corrective wave might take shape of a zigzag or flat or a triangle. In this case, it could be a potential zigzag towards 0.5950 levels, going forward.

Also note that fibonacci 0.618 retracement of the entire rally between 0.5470 through 0.6800 is seen through 0.5950 mark. Probability for a bullish reversal remains high if prices manage to reach there. Bulls would be poised to take control back from those levels.

Looking at the lower degree wave structure, the drop between 0.6800 and 0.6500 could be marked as a lower degree Wave 1. The impulse drop is either complete around 0.6511 or might be close to terminating just below 0.6500 mark.

Traders might remain inclined to sell o a potential Wave 2 termination close to 0.6650 and 0.6700 levels respectively. The protective stop would go above 0.6800 while projected targets might be seen towards 0.5950 respectively.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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