NZDUSD Resistance Stays At 0.6600

17 July 2020

NZDUSD might be preparing to break below 0.6375 initial support and the trend line support. It is holding up the 0.6600 handle, which is marked as immediate resistance. A push below 0.6500 would confirm a meaningful top in place.

NZDUSD potential wave counts are as follows. The rally since 0.5470 through 0.6600 seems to have carved Waves 1, 2, and 3 until now. Since the rally is 3 waves until now, we have labelled as potential Waves A, B and C as well.

Please note that major resistance lies ahead around 0.6760 levels and if bulls are able to break higher, NZDUSD would turn bullish for a long term since an impulse would be complete there. Until that happens, we need to be prepared for a turn lower.

At the moment, until 0.6600 remains intact, NZDUSD is poised to produce a corrective drop towards fibonacci 0.618 of the entire rally between 0.5470 and 0.6600 respectively. Wave A of the proposed A-B-C drop might terminate around 0.6170/80 levels.

Wave B could pullback higher towards 0.6400 mark, before Wave C drops lower towards 0.5900 levels respectively. For the above proposed structure to materialize, we need to see NZDUSD to break below 0.6375 support, going further.

Alternately, a break above 0.6600 would open doors towards 0.6760, which is marked as the next major resistance. NZDUSD is expected to produce a bearish reversal, if prices manage to reach there. Traders might remain short for now with stops above 0.6600 mark.

Prepared by
Technical Analysis Team

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