In our previous analysis on NZDUSD, titled “A Disappointing Week Ahead For NZDUSD?”, we shared our bearish view of the pair, saying that “buying NZDUSD now is the exact opposite to the right decision”. We thought so, because there was a clear five-wave impulse on the 4-hour chart. And, according to the Elliott Wave Principle, every impulse is followed by a three-wave correction in the opposite direction. See the chart below, if you need a reminder.
As visible, while NZDUSD was trading near 0.6810, we were preparing for a decline of around 200 pips. The next chart shows how the situation developed.
The correction we have been expecting, turned out to be a W-X-Y double zig-zag. Wave Y fell as low as 0.6620. NZDUSD gave us another example of the accuracy the Elliott Wave Principle often provides. But now what?
Now, when the anticipated correction seems to be over, the 5-3 wave cycle looks complete as well. This means the larger uptrend might be ready to resume. If this is the correct count, levels above 0.6900 should not be surprising. The bulls look eager to return to NZDUSD again.
