NZDUSD Elliott Wave Analysis

Forex Pair : NZD/USD

Date : 3rd July 2020

Time Frame : 4 Hr

A-Leg In The Larger Degree

Let’s recap our NZDUSD Elliott Wave analysis when it began the reversal move.

The rally on the Kiwi started on the 19th of March 2020.

Similar to the Aussie, the Kiwi is also considered a “Commodity” currency.

Hence, its movement can sometimes be quite similar to its neighbor currency.

The first A-leg in the larger degree seems to have made a 5 wave “Leading Diagonal” with an internal 3-3-3-3-3 structure.

Let’s break it down with more details.

Wave [1] in black began the move topside with a (w)-(x)-(y) motive wave with a more extended y-leg.

This is followed by a wave [2] in black in the form of a shallow range-bound (w)-(x)-(y) correction.

Wave [3] in black can be viewed as a 5-3-5 (a)-(b)-(c) structure albeit it is considered pretty short as compared to the rest.

Next, wave [4] in black seems to have made a much larger 5-3-5 (a)-(b)-(c) corrective structure.

Referencing the law of alternation, this comes as no surprise.

With the Kiwi showing continual strength, the wave [5] in black ended higher, showing similar strength to wave [3].

Possibly completing the first A leg in blue of the larger degree.

B-Leg In The Larger Degree

As always, after any motive wave, the markets will generally tend to consolidate.

The subsequent sideways corrective structure that followed looks likely to be an (a)-(b)-(c) Zig-zag corrective structure.

I initially labeled it as a [w]-[x]-[y] in black as the [a] wave started off quite impulsively.

But in hindsight, when the [c] wave ended quite impulsively, it looks more like a 5-3-5 zig-zag.

And with the completion of this Zig-zag correction in the larger B degree in blue, the Kiwi took off again.

C-Leg In The Larger Degree

Like its neighbor, the Kiwi was quick off the block upon completion of the larger corrective structure B in blue.

The impending rally took shape in a 1-2-1-2 Elliott Wave pattern with a steep wave [1] in black.

This is followed by a shallow wave [2] in black that hardly reached the Fibonacci 38.2% retracement level.

This impulsive move resulted in a nested 3rd wave sequence with its own 5 wave sequence.

Now, here comes the controversial corrective wave [4] in black.

Based on my NZDUSD Elliott Wave analysis, there seem to be 2 alternatives.

My first alternative is that the possibility of an (a)-(b)-(c) corrective structure in the form of wave [4] has completed.

My second alternative is that this 3 wave correction is just the beginning (W) leg of a larger (W)-(X)-(Y) correction.

However, judging from the magnitude of the proposed wave [4] correction as compared to shallow wave [2].

I am more inclined to believe that the first alternative is more likely to play out.

The current NZD/USD Elliott Wave analysis seems to indicate that the Kiwi might be in the home stretch.

High probability that wave (1) & wave (2) in blue of the last wave [5] in the larger degree has completed.

And we are likely to be in the midst of wave (3) in blue.

My Elliott wave forecast is for the Kiwi to continue the rally higher to at least test the previous interim high at 0.67549.

Please DYODD before taking any trades based on our NZDUSD Elliott Wave analysis.

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