The NZDUSD rose heavily yesterday after so much struggle between the bulls and the bears in the previous day. Will the intraday bearish trend resume?. With 16 February NZDUSD Elliott wave setup, we provide some ideas of high likelihood.
16 February, AtoZForex – In the last update on NZDUSD after the RBNZ meeting, we provided two scenarios prior the meeting. The meeting came with rate unchanged and with some statements of effect, price fell. Meeting with our expectation, we expected the fall to get to 0.707 before a rally. The fall was born out of an impulse wave that broke out of a medium term zigzag to continue a long term correction upside.
The chart below was the chart representing our first scenario before the event.
We followed the chart above with the following statement.
If this scenario holds, a correction downside will be seen. A good bearish momentum break below 0.7190 will be good for an intraday opportunity. In this scenario, price will stay below 0.7375 and then dip to 0.707 or below before the rally resumes.
Price fell and the chart below is now what we have.
The bearish correction shows the early sign of a zigzag pattern. The pattern can go as deep as 0.7032 (61.8% Fibo retracement) or below. The wave (a) is an impulse wave and the pullback is a zigzag of a lower degree. There presents an opportunity for more bearish move to 0.7032. The sub-waves of wave (b) zigzag is explained below.
16 February NZDUSD Elliott wave setup; bearish opportunity?
Will the bears resume with the completion of the intraday zigzag below.
The chart above shows that the zigzag (b) has completed and a bearish move is imminent. The bearish drive should be contained below 0.7242 to make this idea valid. Any spike above 0.7242 would mean that the correction upside continues or the bullish trend is about resuming. Intraday traders can look for favorable break below o.7210 with stop loss at 0.7242. Potential target is toward 0.7032 for a wild R/R of about 1:6. That’s the kind of opportunity anyone would want to take.
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