The Kiwi is pointing lower, as we see it trading in a five-wave bearish impulse from Elliott wave perspective.
NZD CPI data came out lower than expected this week, down to 1.2% on a quarterly basis from 1.5 forecasts. “But the previous reading was 1.4%. So number beat expectations by a lot, thus there is less chance for a new hawkish surprise by RBNZ on their upcoming meetings. As a result, NZD is coming down and this weakness may resume even lower if stocks will remain weak.
From Elliott wave perspective, NZDUSD recovered nicely from 0.6083 but it’s in three waves after recent rejection down from 0.6390 resistance. We see this as a potential corrective rally that represents (B) wave, possibly already completed after lower swing high and new swing low formed in the last few trading days. Ideally, pair is now headed south for five wave drop within (C) which has room even for 0.6000. However, this wave (C) is still part of a higher degree contra-trend movement, so we believe that Kiwi will turn bullish this year, but from lower support levels, according to daily count.
We have been warning about Kiwi (NZDUSD) weakness already on twitter, so make sure to follow us.
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