close icon

GBPNZD: A Bearish Elliott Wave Cycle is Worrisome

Three weeks ago, GBPNZD was hovering around 1.8900, but the Elliott Wave principle suggested the recovery from 1.8125 was “far from over.” A three-wave pullback was supposed to occur, followed by another rally towards the resistance area between 1.9250 – 1.9630. The chart below, published on January 2nd, explains.

Elliott wave analysis GBPNZD Forex pair

The recovery from 1.8125 looked like a five-wave impulse in wave “a” of (2), labeled i-ii-iii-iv-v. It followed an even larger impulse pattern from 2.0470 to the south, marked as wave (1).

According to the Wave principle, a three-wave correction occurs after every impulse. Since wave “a” was a five-wave pattern, we thought it was just the first phase of a larger a-b-c zigzag correction in wave (2). A pullback in wave “b” and another rally to a new high in wave “c” were supposed to develop before wave (2) ended.

Yesterday, the pair climbed to 1.9299, so now is a good time to take another look.

GBPNZD completes 5-3 Elliott Wave cycle

Wave “b” dragged GBPNZD down to 1.8602 on January 11th. Then, the bulls took the wheel and drew a five-wave impulse in wave “c” up to 1.9299 eleven days later. If this count is correct, the 5-3 wave cycle from the top at 2.0470 is complete. The trend should now resume in the direction of the impulsive sequence.

Wave (2) just touched the 50% Fibonacci level, but the dip from 1.9299 is still too small and cannot confirm the resumption of the downtrend. Traders should wait for a breach of the support line drawn through the lows of waves (1) and “b” of (2) before joining the bears in GBPNZD.

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover similar opportunities yourself!



Stay informed with our newsletter

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

Privacy policy
You may also like:

GBPUSD To Resume Uptrend Once Correction Ends

The Brexit saga continues as Boris Johnson’s re-election puts Britain firmly on the path of leaving the EU on January 31st 2020. And while the results of the June 2016 referendum caused a crash to 1.1650 by October 2016, GBPUSD is trading near 1.3100 today. The chart below reveals the structure of the recent recovery…

Read More »

GBPCAD Can Reach 1.9000 Before the Bears Return

GBPCAD bulls have been on a roll the past four months. The pair is currently trading above 1.7330, up 9.1% from its early-August low of 1.5875. And while the Forex market is not the place to rely on a trend for very long, it is not uncommon for GBPCAD to make large moves in either…

Read More »

EURAUD Impulse Pattern Keeps the Bulls in Charge

Twenty days ago, EURAUD managed to stop the bleeding and form a bottom at 1.5976. As of this writing the pair trades around 1.6250 after reaching 1.6324 on November 20th. Is the uptrend still in progress or should we prepare for the bears’ return? A look at EURAUD ‘s hourly chart through an Elliott Wave…

Read More »

EURUSD Turns Up Ahead of Brexit Talks Breakthrough

EURUSD is up by 260 pips since the beginning of October. The pair climbed from 1.0879 to 1.1140 in just 14 trading days. The rally appears to be fueled by optimism regarding a possible Brexit deal and the tentative “phase-one” agreement between the US and China. In our opinion, however, there is something more to…

Read More »

USDJPY Pattern Makes More Sense than Politics

The last two weeks were different like night and day for USDJPY traders. The pair fell from 108.47 to 106.48 during the first three days of October and eventually closed the week in negative territory. The last five trading days, on the other hand, told a much different story. Last week, USDJPY rose from 106.66…

Read More »

GBPAUD Elliott Wave Setup Supports the Bears

Between July 30th and August 26th, GBPAUD managed to recover from 1.7561 to 1.8337. Despite the no-deal Brexit prospects, the Australian dollar turned out to be even weaker than its British rival for almost a month. However, GBPAUD is down by roughly 400 pips since August 26th. Traders are probably wondering if this is a…

Read More »

EURUSD Absorbs Economic, Trade War and G-7 News

EURUSD made a new low last week. The pair fell to as low as 1.0963 on Friday adding to the downtrend it has been trading in since February 2018. The last time the European currency traded this low against the greenback was in May 2017. The last few months have been characterized by new lows,…

Read More »

More analyses