Wave summary:
We did see an anticipated breakout above resistance at 1.6490 for a rally higher to 1.6749. This morning, RBNZ cut its rates by 25 basis points, which should help this cross move even higher. However, a rather hawkish statement from RBNZ after the rate cut caused a deep retracement of the rally from 1.6049 to 1.6748. We do regard a decline from 1.6748 as a corrective decline, which have ideally terminated at 1.6242 for the next impulsive rally higher towards 1.7191.
That said we have to accept a possibility of an even deeper corrective decline closer to 1.6049, but at no point is this low allowed to be broken as that will invalidate the above count.
Trading recommendation:
Our stop at 1.6390 was hit for a nice 345 pip profit. We will only buy on a break above 1.6348 and place a stop just below the most recent low.
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