NZDUSD bottomed at 0.6620 and bounced up to 0.6770. This recovery was immediately followed by a new decline to 0.6684 so far. What to expect from now on in the short term? The Elliott Wave Principle might help us find the answer. First, we need to take a look at the 15-minute chart of NZDUSD, where the wave structure is visible.
As you can see, NZDUSD has drawn an almost perfect 5-3 Elliott wave cycle. Even the sub-waves of waves 1 and 3 are clearly visible. The guideline of alternation is also demonstrated with wave 2 being a zig-zag and wave 4 – a triangle. “Almost perfect”, because wave C to the south does not seem finished yet. It still has wave “v” down left. If this count is correct, we should expect one last wave down to take the NZDUSD exchange rate to the 61.8% Fibonacci retracement level. After that, the pair should reverse to the upside again. In conclusion, targets above 0.6770 remain valid, as long as 0.6620 stays untouched.