NZDUSD has seen the formation of an intervening wave x of a cycle degree. Wave x is a double zigzag consisting of primary sub-waves, the last part of which is an intermediate double zigzag (W)-(X)-(Y).
After impulse wave (1) ended, the market began to decline in a shallow correction (2). The intermediate wave (2) can end near the target level of 0.703.
At that level, the entire wave (2) will be at 38.2% of impulse (1). Prices could rise above the previous maximum of 0.731, at the primary wave Ⓧ.
An alternative scenario indicates that the interventing wave x of the cycle degree may not be complete yet. According to this view, the last part of this wave is still under development. It consists of intermediate sub-waves (W)-(X)-(Y), where wave (X) was recently formed.
The wave (X), by its structure, is a simple flat. After the full completion of this flat, the market began to move down in a new bearish wave (Y).
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In this case, the previous minimum shown by the minor wave X determines the target.
Thus, in the coming trading weeks, we may see the market decline below the level of 0.680, as indicated on the chart.
Article by Orbex
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