Forex Technical Update
- The NZD/USD continued to rally after the RBNZ left the OCR at 2.5% and did not change any prospect of a rate hike.
- The rally after the risk event started with a very strong bullish candle seen in the 1H chart, which materialized into a 3-wave rally. There is a wave equality between the upswings, and the market turned around at 78.6% retracement, a classic reaction to this retracement pattern - the Gartley.
- We are in consolidation mode, and it is not clear yet what direction the market is heading to although the underlying trend has been bullish.
- However, if the market can push below 0.8675, it is a sign of topping in the short to medium term.
- The bullish continuation is also contained below 0.8765 0.8780 (basically 100% expansion, or wave equality). A break above this targets 0.8950, near 150% fibonacci expansion.
Fan Yang CMT
Chief Technical Strategist