NZDUSD had remained shy by just a few pips off a major resistance seen towards 0.6755 mark. The currency had print 0.6715 and reversed lower. It is quite possible that a meaningful top has been carved around recent highs or yet another high remains above 0.6755 handle.
NZDUSD probable wave counts are as follows. Since printing lows around 0.5470 in March, the currency has been in control of bulls. It has managed to carve a series of higher highs and higher lows and seems to have completed an impulse at 0.6715.
Ideally, an impulse wave should be followed by a corrective wave in the opposite direction. In this case, NZDUSD bears should be poised to take control from here and push prices lower toward 0.6000 levels going forward.
A break below 0.6775 mark would confirm with respect to price action, that NZDUSD has carved a meaningful top around 0.6715 and that the corrective drop is on its way towards 0.6000 mark. Alternately, a break above 0.6715 would attempt a test through 0.6755 levels.
NZDUSD should unfold its corrective wave as a zigzag or flat in ideal situation. The first wave should ideally terminate towards fibonacci 0.382 around 0.6250, followed by a slight pullback and then lower towards 0.6000/0.5950, which is fibonacci 0.618 retracement of the above rally.
Traders might remain inclined to initiate fresh short positions around 0.6660/70 levels with protective stop above 0.6715 and projected targets towards 0.6250 and 0.6000 respectively. A break above 0.6715 would delays matters further.
Technical Analysis Team
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