NZDUSD Tests Resistance Around 0.6800 Mark
18 September 2020
NZDUSD seems to be re-testing its recent swing highs around 0.6790/0.6800 mark at the moment. It might be carving a potential double top before reversing. Immediate support is now seen around 0.6600 mark and a break lower will confirm a meaningful top in place.
NZDUSD probable wave counts are as follows: The indice has carved an impulse wave from 0.5470 lows in March 2020. It might be close to terminating the 5th wave close to 0.6800 handle before giving in to bears. Also note that today’s high is accompanied by a bearish divergence.
High probability remains for a bearish reversal from here and bears might want to take out 0.6600 lows to confirm a top is in place. Also note that the impulse wave should be followed by a similar degree corrective wave, either flat or zigzag.
NZDUSD bears might be inclined to produce a 3 wave drop towards 0.5950 levels in the next several weeks. Also note that 0.5950 is fibonacci 0.618 retracement of the above impulse rally between 0.5470 and 0.6790 respectively.
If prices manage to drop towards 0.5950 mark, NZDUSD bulls might be prepared to take control back and resume higher. Furthermore, it is also close to the previous Wave 2 termination around 0.5900 levels. Support should be strong around that region.
Traders might be willing to initiate short after a break below 0.6600 support, with protective stops above swing highs and potential target towards 0.5950 respectively.
Prepared by
Technical Analysis Team
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