Elliott wave analysis of NZD/USD for December 22, 2020

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On December 15, we posted an article on NZD/USD. The article focused on NZD/USD having stamped a five wave rally since the 0.5468 low in March 2020 and a top was nearby, but a break below key-support at 0.7006 would be needed to confirm the top of wave 5/ was in place and a larger correction towards at least 0.6522 unfolding. Wave 5/ moved slightly higher that the peak we already had seen at 0.7120 to a new high at 0.7172. At this peak wave 1/ and wave 5/ was equal in length and at the same point wave 5/ was 50% of the distance traveled from the low of wave 1/ through the peak of wave 3/ added to the low of wave 4/. This means the odds of a top being in place at 0.7172 is high and a break below key support at 0.7006 only should be a matter of time confirming the onset of a larger correction in wave 2 or B.

RSI continues to flag a clear loss of upside momentum and has already broken down indicating increased downside pressure on NZD/USD

R3: 0.7172

R2: 0.7140

R1: 0.7113

Pivot: 0.7055

S1: 0.7006

S2: 0.6960

S3: 0.0.6907

Trading recommendation:

Protect long positions and revers to a short NZD position upon a break below 0.7006

The material has been provided by InstaForex Company - www.instaforex.com