By Orbex
The internal structure of the NZDUSD pair hints at a cycle zigzag pattern that consists of sub-waves a-b-c. On the chart, we see the end of a large correction wave b of the cycle degree. It took the form of a primary triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ.
After the cycle correction was complete, the market turned around, and we saw the development of a cycle wave c. This has the form of an ending diagonal consisting of primary sub-waves ①-②-③-④-⑤.
Most likely, the formation of a new bearish trend is starting. This could take the form of a primary impulse ①-②-③-④-⑤. In the near future, the price will fall in the primary wave ③ to 0.628. At that level, it will be at 161.8% of wave ①. Then the development of the primary fourth correction is likely.
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In the second scenario, the formation of a cycle zigzag has not yet ended. The final primary wave Ⓩ, which is part of correction b, took the form of a triple zigzag (W)-(X)-(Y)-(X)-(Z) of the intermediate degree.
According to this view, the first four parts of the intermediate pattern ended. Now the market is in the intermediate wave (Z). Wave (Z) is similar to the minor double zigzag W-X-Y.
Thus, in the upcoming trading weeks, we can expect a price increase and the development of a bullish cycle wave c near 0.721, and possibly even higher. In fact, this is likely to take the form of an impulse.
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Article by Orbex
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