The New Zealand dollar (NZDUSD) and the S&P 500 are both showing signs of slowing momentum after their recent advances. However, from an Elliott Wave perspective, the current weakness still appears corrective rather than the start of a larger bearish reversal. This suggests the S&P 500 could see only limited downside before resuming its summer consolidation, while NZDUSD may be preparing for another leg higher.
On the 4H chart, NZDUSD has turned impulsively higher after breaking above the 0.5779 level, signaling that an important bottom may already be in place. The rally appears to be developing as wave “a” of a new three-wave abc recovery within higher-degree wave D.
A decisive break above the 0.5865 resistance area would provide a strong bullish confirmation, especially if the advance continues to unfold as a clear five-wave impulse. In that case, the focus would shift toward buying opportunities on corrective pullbacks rather than chasing strength.
On the intraday chart, NZDUSD appears to be forming a wave (iv) correction after the recent rally. The ideal support zone lies between 0.5812 and 0.5793, where buyers could step back in before another push higher in wave (v).
As long as the pair remains above key support, the technical outlook favors additional upside, while the S&P 500’s corrective pullback may also remain limited before the broader bullish structure resumes.
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