NZDUSD seems to be testing a major resistance around 0.6700/30 levels. The currency is seen to be preparing for a meaningful reversal lower towards 0.5900 levels, as bears are looking poised to take control back.
NZDUSD probable wave counts are as follows: The rally from 0.5470 through 0.6700 levels seem to have completed an impulse wave, clearly sub dividing into 5 waves as seen on the 4H chart here. A break below 0.6600 would confirm.
An impulse rally should be ideally followed by a corrective drop towards 0.6230 levels at least, which is fibonacci 0.382 retracement of the entire rally between 0.5470 through 0.6700 respectively. NZDUSD remains vulnerable to resume lower from here.
NZDUSD also faces a major price resistance around 0.6700/30 levels. A break above the resistance also indicates that bulls have registered themselves strong and they are here to stay in control for longer time.
NZDUSD should be preparing for a 3 wave corrective drop either from current levels, 0.6700 or from 0.6750 levels respectively. Please note that the drop might extend itself towards 0.5900 levels, which is also previous Wave 4 termination.
Traders might be preparing to initiate fresh short positions on the break of 0.6600 levels going forward. The protective stop would go above swing highs and targets below 0.6300 and 0.5900 respectively.
Technical Analysis Team
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