Forex Technical Update
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.
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