On December 15, we posted an article on NZD/USD. The article focused on NZD/USD having stamped a five wave rally since the 0.5468 low in March 2020 and a top was nearby, but a break below key-support at 0.7006 would be needed to confirm the top of wave 5/ was in place and a larger correction towards at least 0.6522 unfolding. Wave 5/ moved slightly higher that the peak we already had seen at 0.7120 to a new high at 0.7172. At this peak wave 1/ and wave 5/ was equal in length and at the same point wave 5/ was 50% of the distance traveled from the low of wave 1/ through the peak of wave 3/ added to the low of wave 4/. This means the odds of a top being in place at 0.7172 is high and a break below key support at 0.7006 only should be a matter of time confirming the onset of a larger correction in wave 2 or B.
RSI continues to flag a clear loss of upside momentum and has already broken down indicating increased downside pressure on NZD/USD
R3: 0.7172
R2: 0.7140
R1: 0.7113
Pivot: 0.7055
S1: 0.7006
S2: 0.6960
S3: 0.0.6907
Trading recommendation:
Protect long positions and revers to a short NZD position upon a break below 0.7006
