NZDUSD reached 0.8777 in the beginning of the month, but was unable to hold the bullish momentum, reversing to the downside towards 0.8470, where the pair is currently trading. What we are interested in is the wave structure of this 300-pip move. Three waves would mean that the larger trend is still up, while an impulse would suggest, that more weakness lies ahead.
The hourly chart shows an impulsive five-wave decline for NZDUSD. The sub-structure of wave 3 is also clearly visible. Wave 4 is a nice contracting triangle. We have all the evidence, which the Elliott Wave Principle could provide, to expect a three-wave correction to the upside in wave (2)/B. Once it is finished, another sell-off in wave (3)/C is likely. This count would be invalidated, if prices return to 0.8777.