On NZDUSD we are tracking a falling price activity which can be counted in five waves from 0.7059 high. We believe this five wave drop can be a higher degree wave 5) as part of a bigger bearish cycle, which in Elliott wave theory must be structure by five legs. Current drop that is on display is leg five, that can touch levels near the Fibonacci projection zone of 161.8/200.0 from where a new temporary bounce may follow.
A bounce in impulsive fashion from the lows and above the upper channel lines would confirm a completed decline and a minimum three-wave recovery.
On the intra-day chart below we dissect even further the price structure since 0.6920 level, and as we can see pair is making a clear impulsive reaction. An impulse is a clear wave in five minor legs, which is still not the case here as we are still looking for two minor legs. That being said, currently we see price probably unfolding corrective wave iv), that can once completed push price into a new low towards 0.6766-0.6720 area.
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