NZDUSD Hits Resistance Close To 0.6700 Levels

24 July 2020

NZDUSD seems to be preparing for a meaningful drop towards 0.6230 levels at least. The currency pair might have struck resistance just below the 0.6700 handle yesterday. Bears are now looking poised to remain in control from here on.

NZDUSD has been in a religious up trend since 0.5470 lows in March 2020, as discussed over the last week. Bulls have remained in control and managed to carve a series of higher highs and higher lows until yesterday’s high around 0.6689.

NZDUSD probable wave counts are as follows: The currency has now completed 5 waves rally between 0.6470 and 0.6689 respectively. The sub waves have been marked as Waves 1, 2, 3, 4 and 5 respectively from 0.5470 through 0.6690 yesterday.

Also note that another high towards 06700/30 remains possible and in that case, we would re-adjust the termination of Wave 5 accordingly. At the moment, the impulse wave seems to be complete around 0.6689 levels.

As discussed earlier, an impulse wave is ideally followed by a corrective wave in the opposite direction. If the above proposed wave structure holds well, NZDUSD should be preparing for a 3 wave corrective drop towards 0.6230 levels at least.

The fibonacci 0.382 retracement of the entire rally between 0.5470 and 0.6689 is also seen passing through 0.6230 mark. High probability remain for a potential bullish bounce if prices manage to reach there.

Prepared by
Technical Analysis Team

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