close icon

AUDNZD Gains 500 Pips After Fibonacci Encounter

AUDNZD shot up sharply today, following a statement from the Reserve Bank of New Zealand that cemented the country’s interest rate at its current level for the foreseeable future. The pair was trading below the 1.1000 mark before the announcement, but rose to 1.1175 shortly after it.

However, if you have been following our publications for some time, you know that Elliott Wave analysis is our specialty. And Elliott Wave analysts do not regard news as the main engine behind market price movements. As the great Ralph Nelson Elliott once said, “at best, news is the tardy recognition of forces that have already been at work for some time and is startling only to those unaware of the trend.

Was there an uptrend already in progress prior to RBNZ’s announcement then? Yes, there was, and the chart below, published in our last update on AUDNZD on June 19th helped us identify it.
audnzd fibonacci trading
As visible, while the pair was hovering below 1.0680, the Wave principle suggested we should expect more strength in AUDNZD. The logic behind our bullishness was simple. You find a five-wave impulse to the upside, followed by a three-wave correction in the opposite direction and – voila! – you have a textbook bullish setup in front of you.

In AUDNZD’s case above, the impulsive sequence was labeled i-ii-iii-iv-v, while the three-wave pullback looked like a simple a-b-c zigzag. Furthermore, wave “c” was touching the 61.8% Fibonacci support level, giving us another reason to prepare for a bullish reversal. Less than two months later today, here is an updated chart.
AUDNZD Elliott Wave forecast update
AUDNZD started climbing right away. Today’s intraday high of 1.1175 means the bulls have lifted the pair by over 500 pips from the bottom at 1.0658. On top of that, the rally is still far from over. Since wave (a) was an impulse, wave (c) needs to be an impulse, as well. So far, it does not look like one. Third waves are usually 1.618 times longer than first waves. In order to achieve that feat, wave iii needs to reach 1.1380, before waves iv and v complete the pattern.

So far so good, but in Elliott Wave analysis no pattern develops in vacuum. Let’s take a look at the daily chart of AUDNZD and see where does the recent price action fit into the bigger picture.
AUDNZD daily chart Elliott wave analysis
It appears today’s bounce is part of wave 3 of an ending diagonal wave C within a large A-B-C corrective recovery starting from 1.0021 in April, 2015. If this count is correct, wave 3 can be expected to visit the area between 1.1500 and 1.1600, before the bears return in wave 4. 1.1800 looks like a reasonable target for wave 5 of C.

In conclusion, the stage was set for a rally in AUDNZD almost two months ahead of the RBNZ’s interest rate statement. Despite today’s surge, the bulls remain in charge with short-term targets in the vicinity of 1.1400. In the long run, 1.1800 is still up for grabs.

Did you like this analysis? Learn to do it yourself with our eBook Elliott Wave guide!



Stay informed with our newsletter

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

Privacy policy
You may also like:

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

USDTRY Heads South After Central Bank Decision

Turkey finally took a decisive step towards taming the double-digit inflation, which has been destroying the Lira’s value for years. The country’s central bank lifted the benchmark interest rate to 15%, up 475 basis points from its previous standing. USDTRY fell as low as 7.5031 earlier today, on track for a second consecutive week of…

Read More »

GBPNZD Can Slide to Sub-1.9000 In Coming Weeks

What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out on Sunday! GBPNZD exceeded 2.0270 in mid-August, but the bulls could not keep the positive momentum. A month later, the pair fell to 1.9055, losing 6% in the process. And just when it…

Read More »

Ahead of EURUSD ‘s 280-pip Drop in September

EURUSD had been on a tear since mid-March when it bottomed out at 1.0636. Nearly six months later, on the first day of September, the pair exceeded the 1.2000 mark. The bulls seemed firmly in control and the Fed’s money printing suggested further losses ahead for the dollar. However, years of experience had taught us…

Read More »

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 »

More analyses