Forex Technical Update

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NZD/USD 4HChart 11:15AM EDT 6/26/2012


The 4H USD/CHF chart shows a bearish breakout from June's rising trendline, and a sharp one at that. However, the market has since consolidated. In our previous update, we noted a bearish swing projection toward 0.7750. Since then, the market has stalled the decline and consolidated after finding support in the 0.7845-07850 area. However, the recover has so far been capped under the 0.9520-0.9530 area.

The structure seen in the 1H chart has bearish implication. The dip from 0.8014 to 0.7845 was in a clear and traditional 1-2-3-4-5 impulse wave, where wave 3 is the sharpest, and wave 1 and 5 are similar, and of course wave 4 does not overlap with wave 1. An impulse or motive wave represents trending intent, while corrective structure of course represents consolidation/correction intent.

After this 5-wave decline, the market is possibly in an expanded flat pattern, which might be completed at c, or might be followed by another d and e wave.

The point is, that the structure downward looks motive, while the structure upward looks corrective, so the bearish outlook remains valid.

NZD/USD 1HChart 11:12AM EDT 6/26/2012


Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.