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 seemed the bears were firmly in control, the pound started rising against the kiwi again.
Last week, it touched 1.9729 despite surging COVID-19 cases in the UK and stalled Brexit negotiations. To try and make sense of GBPNZD’s behavior, let’s take a look at it from a different point of view. The chart below puts the past two months into Elliott Wave perspective.
The pair’s hourly chart reveals that the decline between 2.0271 and 1.9055 is a clear five-wave impulse. The pattern is labeled (1)-(2)-(3)-(4)-(5), where the five sub-waves of wave (1) are also visible.
According to the theory, a three-wave correction in the other direction follows every impulse. In GBPNZD, we see a simple (a)-(b)-(c) zigzag retracement, where wave (b) appears to be a triangle. This means the pair has now drawn a complete 5-3 wave cycle to the downside.
If this count is correct, we can expect the downtrend to resume from here. Targets below the bottom of wave (5) are plausible, which opens the door for a slide to sub-1.9000 in the weeks ahead. Even if it turns out the corrective phase of the cycle is not yet over, the odds remain in the bears’ favor as long as GBPNZD trades below 2.0271.
What will EURUSD, USDJPY and USDCAD bring next week? That is the subject of discussion in our next premium analyses due out on Sunday!
