close icon

AUDNZD Bulls to Show Their True Power

Nearly a month ago, on April 6th, the AUDNZD exchange rate was trading close to 1.0820, after falling from as high as 1.1018. But instead of buying the dip right away, in an article called “AUDNZD Navigating Through Elliott Waves”, we suggested traders would be better off waiting for the pair to improve the risk/reward ratio of the long trade by declining to the support area of wave (iv) of 1, as shown below.
audnzd elliott wave chart
As visible, the rally from 1.0324 to 1.1018 was a five-wave impulse with an extended wave (v). According to the Elliott Wave Principle, extended fifth waves are usually retraced completely by the following three-wave correction. That is why we thought AUDNZD was not done falling and more weakness could be expected before the uptrend resumes. Almost a month after that analysis the Australian dollar is trading around 1.0890 against the New Zealand counterpart. Without looking at a chart, you might think almost nothing has happened during that time, so let’s see one.
audnzd forex pair elliott wave chart
As expected, the bears were not ready to give up yet. They applied more pressure until AUDNZD plunged to 1.0642, retracing the entire wave (v). However, the trend was supposed to resume in the direction of the five-wave impulsive sequence, which is the Elliott Wave explanation for the pair’s quick recovery to 1.0934 as of May 1st. Now we want to take a closer look at this rally’s wave structure.
audnzd intraday elliott wave chart
The bulls’ efforts produced a nicely-looking impulsive rally from 1.0642 to 1.0934. This means two things. First, the buyers are still in the driving seat. And second, that once again, a pullback to the support area of the fourth wave – iv – should be anticipated. Even if it extends further to the downside, the outlook remains positive, as long as the starting point of the pattern – 1.0642 – is intact, because wave (ii) cannot retrace the entire wave (i).

If this analysis is correct, the powerful phase of the bull run – wave (iii) of 3 of (3) – might be just around the corner. According to our big picture outlook, long-term targets near 1.1600 remain plausible.

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Ahead of GBPUSD in Both Directions. Now What?

GBPUSD had a good run over the past six months, climbing from its 1.1412 March low to as high as 1.3483 last week. The pair is now back below 1.3000 after the latest portion of Brexit-related mess. Later in this article we will share our view of where the Pound is headed against the dollar,…

Read More »

USDTRY Set to Complete 12-Year Impulse Pattern

The U.S. dollar has been steadily climbing against the Turkish lira since 2008. Ten years later, in 2018, USDTRY reached 7.1500 on the back of geopolitical tensions and President Erdogan‘s reckless political decisions. In May 2019, however, the pair was down to 6.0600 and it looked like the Lira’s plunge might be finally over. Unfortunately,…

Read More »

EURUSD Up 420 Pips in a Month as Uptrend Resumes

The inevitable seems to be happening to the U.S. dollar. After record-breaking liquidity injections by the Fed in response to the COVID-19 crisis, the greenback is weakening across the board. The U.S. dollar has recently been declining against its major rivals, including the Yen, the pound and the euro. EURUSD, the most traded Forex pair…

Read More »

GBPJPY Bears Aiming at 120, Before Giving Up

Whether it is because of Brexit or not, GBPJPY has been trading below 160.00 ever since the referendum in June 2016. The pair has been locked in a wide range between 156 and 124 for four years now. Last week, it closed the session at 134.66, down from 138.84 at the open. In order to…

Read More »

Elliott Wave Setup Helps EURUSD Add 325 Pips

EURUSD has been under pressure for over two years now. The pair reached 1.2556 in February 2018, but has been making lower lows and lower highs ever since. Yet, the past couple of weeks painted a different picture. Between May 18th and May 29th, the euro surged 325 pips against the U.S. dollar. In those…

Read More »

EURGBP Pattern Signals Bullish Reversal Ahead

EURGBP has been in free fall since March 19th, when it rose to 0.9500. A month and a half later now, the pair is hovering below 0.8730, down 8% from the peak. Is the downtrend going to continue or should we expect a change of direction? That is the question we hope to answer in…

Read More »

GBPUSD Aiming at 1.30, but May Tumble to 1.21 First

Not long ago, we shared our long-term view of GBPUSD. In our opinion, the down-phase of the pair’s cycle, which is in its 13th year now, is almost over. One last dip to 1.1000 is likely to be followed by a major bearish reversal and the start of the next up-phase. Now, we are going…

Read More »

More analyses