the EUR/NZD has been ranging for many weeks now. When can we expect the next major move to occur and in which direction? Today’s post will provide an updated technical and wave analysis.
ABC Nearing Culmination
The EUR/NZD appears to be creating a distinct ABC zigzag structure since the Dec 1st 2017 high. It could be still part of a long wave 4 of an overall uptrend (grey wave count), but some peculiarities within the swings of the 2017 uptrend make it difficult to determine whether we are really dealing with a bullish impulse since Feb 2017 or some larger complex sideways correction (black W).
Price-action since the Dec 1 2017 high is approaching the completion of a zigzag pattern by itself and would apply in both scenarios. Price should therefore continue to drop below 1.6510 (end of yellow wave A) after some more sideways correction over the next few days, in order to finish the overall zigzag.
There is a POC around 1.6350, consisting of the 50% Fib retracement level of grey wave 3, the 544 EMA of the daily chart, the 144 EMA of the weekly chart, as well as a previous horizontal support zone.
An strong bullish bounce should occur around this level, regardless of which of the bigger picture scenarios plays out in the end. New buy positions at this level could lead to lucrative Reward-to-Risk ratio trade setups.
The ECS.SWAT system would be waiting for a bullish break and retest of the 21 EMA of the 4 hour chart, before entering a long position if and when price approaches these levels. Updates will be posted.
All the best along your trading journey…