NZD/USD Elliott Wave Analysis: Wave B correction seen towards 0.7030

• NZD/USD bears prepare for a correction toward 0.7030 at least.
• 61.8% Fibonacci retracement of recent upswing seen toward 0.6950.
• Bulls remain poised to push towards 0.7200 against 0.6800.

NZD/USD could prepare for a corrective drop toward 0.7030 soon. The currency pair has taken out strong resistance around the 0.7100 level and pushed through 0.7180 recently. The immediate short-term outlook remains bearish against 0.7200.

The larger degree wave count for NZD/USD is indicting that the drop between 0.7460 and 0.6800 was a standard flat (3-3-5), labeled as A-B-C on the chart here. The termination is also Wave (A) on one larger degree.

Ideally, NZD/USD should carve a larger degree Wave (B) towards 0.7200 at least, before resuming lower to terminate Wave (C). Also, note that Wave (B) would subdivide into 3 waves A-B-C as the counter-trend progresses.

The recent rally between 0.6800 and 0.7180 could be labeled as potential Wave A termination. If correct, NZD/USD will soon be underway to produce Wave (B) towards 0.7030 at least. Also, note that 0.7030 is the 30.2% Fibonacci retracement of Wave A.

Furthermore, the probability remains for a drop towards 0.6950, which is 61.8% Fibonacci retracement of Wave A.

If the above structure unfolds accordingly, bulls would remain inclined to push toward 0.7200 as Wave C progresses. Once the counter-trend terminates the larger degree Wave (B), we can expect NZD/USD to resume lower again.

Alternate count

Alternatively, NZD/USD might have completed the corrective drop between the 0.7460 and 0.6800 mark respectively.

In that case, the trend has turned higher against 0.6800, with a potential target above the 0.7460 mark.

Technical levels