A sharp reversal occurred shortly after NZDUSD reached the 0.80 mark. Is this the first stage of the downtrend resumption or just another corrective decline?
It seems that the corrective recovery from 0.7704 in NZDUSD is finally over. The price movement is slow and choppy with a lot of overlapping waves, which is a typical behavior for corrections. In addition, from the top of 0.8032 there is a decline to 0.7786, which could easily be counted as a five-wave impulse.
To be more precise, the retracement before the five-wave sequence seems to be a W-X-Y double zig-zag with a triangle in the position of wave X. According to the Elliott Wave Principle, triangles precede the last wave of the larger pattern. In this case this is wave Y. The impulsive decline that followed serves us as a confirmation that the corrective rally is over and the larger downtrend has resumed. If this is the correct count, we should expect another sell-off in NZDUSD soon. This scenario would be invalidated, if prices go back to 0.8032.
