NZDUSD is getting closer to 0.8800, which may boost the bulls’ confidence, but an Elliott Wave analyst never relies only on rising prices. The weekly chart shows why.
As you can see the whole price action since March 2009 looks corrective – like a double zig-zag, labeled (W)-(X)-(Y). The minimum requirement for wave (Y) is to reach above the top of (W). This means higher than 0.8843.
As visible, wave C of (Y) seems to be an ending diagonal. This pattern is often followed by a “swift and sharp” reversal. In conclusion, there is still some room for NZDUSD to reach 0.8850 – 0.8900, but if this happens, it should not be taken as a bullish signal.
