NZDUSD Takes Out Resistance At 0.6790
04 September 2020
NDUSD has taken out a major resistance at 0.6790 levels this week. Also, it has produced an evening star candlestick pattern on the daily chart. Ideally, it should unfold as intermediary down trend in the next several week. Prices should stay below 0.6790 levels from here on.
NZDUSD probable wave counts are as follows: After having dropped to multi-year lows around 0.5470 mark in, the currency has rallied through 0.6790 levels. It can be clearly sub-divided into 5 waves as labelled on the chart view.
Ideally, an impulse wave is followed by a correction against the major trend, which looks higher. If the above proposed count is correct, NZDUSD should hold below 0.6790 levels and produce a meaningful corrective drop towards 0.6300 and 0.6000 levels respectively.
Immediate support is seen just below the 0.6500 mark and a break lower will confirm a top in place and bears are back in control. Also note that NZDUSD would break its trend support and enter into the sell zone. It might be safe to sell on counter trend rallies thereafter.
Also note that fibonacci 0.618 retracement of the entire rally between 0.5470 and 0.6790 is seen towards 0.6000 levels. NZDUSD should produce a bullish bounce if prices drop towards those levels, over the next several weeks.
Traders might be preparing to remain aside for now and allow a break below 0.6500 support. They might choose to sell on rallies thereafter with protective stops above 0.6790 and projected targets below 0.6000 handle.
Prepared by
Technical Analysis Team
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