NZD/USD – Bearish Until Further Notice – Elliott Wave

The week ahead

21st December – Noon (GMT) : Global Dairy Trade Price Index

I expect Global Daily Trade Price Index to be unchanged at the upcoming data release.

Deficit released in November was mostly motivated by exports and imports between N$5 – 7 billion. Although a smaller deficit is a good sign for New Zealand’s economy, we may not see those effects on the market as traders are more determined on risk trend’s which are focused around the currently threat of the Omricon variant.

Technical Analysis

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The way things are looking on the bigger picture is that the market has been correcting the huge surge we had through 2020’s Covid-19’s first major lockdown we had all the way up to February. So, according to Elliott Wave Theory, we completed a 5 wave count throughout 2020 and this year we have been correcting that.

The picture that I am viewing is that we are currently in Wave C, although a completion of Wave C indicates we will resume the previous trend but we still need to determine when Wave C will complete.

I can potentially see the price continuing its bearish momentum into the 0.654 support handle which is also combined with 50% Fibonacci Retracement. I will seek to resume the previous bullish trend when it breaches the 0.685 key level.