AUD/NZD – Contracting Price Action Continues

2 min read
HubertM

HubertM

Author

Dear Traders,

The AUD/NZD continued to tighten its long-term range throughout the past few months. This post will provide an updated wave analysis for this currency pair.

Triangle Formation is Back on the Menu

Price-action has continued to tighten within a narrowing range over the last months, suggesting that a triangle could still be in the making as we speak (see chart above).

A less likely scenario could be that Minor wave Y could become a flat that would send price down to the bottom of the long-term range towards 1.03 in its final conclusion over the coming trading weeks and months (not shown in chart above).

The least likely possibility in my view is that the entire structure since the touch of parity in 2015 is one single triangle and therefore be a sign of AUD depreciation from now on as the triangle would in this case be already complete and indicate bearish continuation. The price-action prior to 2015 looks best when counted as a complete impulse into the parity low point, and the fundamentals indicate a brighter picture for the AUD than NZD due to reserve bank policy differences.

Medium-term traders will have to continue to be patient because the culmination of the triangle structure within Minor wave Y could still take a few more months before finally giving way for a bullish break of the range with excellent reward-to-risk ratio trade opportunities.

We will gain more confirmation of the pattern over the next 1 – 2 months.

All the best along your trading journey.

Hubert

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