NZDUSD – Near term weakness looks corrective
A larger corrective downtrend started from 0.8845 (Aug’11 high) appears to be unfolding in a multimonth triangle pattern. The corrective recovery from 0.7455 (June low) has the potential to test the 0.8240/0.8320 resistance ahead of 0.8475. A break below 0.7925/0.7800 would renew the bear trend toward 0.7455 in a wave (E) before attempting medium term trend reversal. A break of 0.7455/0.7370 however would deepen the correction.
The currency’s setback from 0.8225 looks corrective so far and it could be a wave B. Downside focus is now on 0.8035. A break below could test the 0.7990/0.7925 support before renewing. The 0.8190/0.8225 resistance is likely to cap near term strength. A break below 0.7925 however refocuses on 0.7805 initially. A reversal above 0.8225 would extend the uptrend toward the tough 0.8320/0.8475 resistance where we expect the pair to fail.
Anantharajan .P, CMT (Technical Strategist, Precise Trader)