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.

You may also like:

Trade War Fears Shrugged Off by USDJPY

Less than a month ago, USDJPY was trading below 105.00 after plunging to 104.64. The media hurried to explain the dollar’s weakness against the Japanese yen with the looming trade war between the United States and China. Today, a trade war between the two largest economies is a near certainty, after China threatened to fight…

Read More »

USDCAD Selloff: Non-Farm Payrolls Just an Excuse

The last time we wrote about USDCAD, it was hovering around 1.29, after a decline from 1.3125. In a video, published on March 28th, we demonstrated how Elliott Wave traders got ahead of the bearish reversal that occurred a week earlier. Two weeks later now, the bulls are yet to find a way to fight…

Read More »

EURCHF Vulnerable to Bearish Attacks

EURCHF fell to 1.1447 on February 8th, but has been steadily recovering ever since. By March 28th, the pair was already testing the resistance near 1.1800, but could not breach it from the first try and fell to 1.1732 earlier today. Should we expect the next attempt soon, or maybe the bulls would need more…

Read More »

USDCAD Bears Land a Heavy, but Predictable Punch

1.2900 has been a tough nut to crack for USDCAD bulls. First, they failed to breach it in late-October 2017. Then they tried again a month later, but the attempt was once again unsuccessful. The third try was in mid-December 2017, but after a swift touch of 1.2921, the pair plunged to as low as…

Read More »

Trade War Not to Blame for USDJPY’s Plunge

USDJPY bulls looked like they were up to something, when the pair climbed to 106.61 on Tuesday. Three days later today, the pair is currently hovering at 104.90 after a 200-pip plunge to 104.64. Conventional wisdom suggests traders should look no further than the looming US-China trade war to explain the Japanese yen’s strength against…

Read More »

USDHUF Close to Major Elliott Wave Support

Surprisingly or not, the U.S. dollar has been losing ground not only to its major rivals like the Euro and the Japanese yen, but against the Hungarian Forint, as well. USDHUF reached 302.22 on December 15th, 2016. A year later, it was hovering near 260.00 and before the end of January 2018, the pair fell…

Read More »

Canadian Dollar Weakness Anticipated by Elliott Wave

Canadian dollar bulls had another week to forget, after the USDCAD rate surged from a low of 1.2615 on Monday to nearly 1.2900 so far. There have been two fundamental factors that applied pressure on the Loonie – the decline in crude oil prices and Donald Trump’s intention to impose import tariffs of 10% on…

Read More »

More analyses