Photo by Austin Distel on Unsplash
 

A few weeks, back at the start of February this year, we saw a USD selling off sharply since the start of the year. But normally that kind of reaction after a New Year will not last long; it just simply may not continue for a whole year, so there are pullbacks if moves at the start of the year are really strong and extended. So we saw plenty of FX pairs moving into some key levels. And NZDUSD was no exception.

We were looking for a flat correction back then with failure break to a new high labeled as B wave, which can belong to an irregular/expanded flat correction. In flats, you will see wave C being very sharp and strong, and normally it will take the price back to former wave A about we talked back at the start of February. So if you were in our community you might have been ready for this type of action.

(Click on image to enlarge)

The question is what do we do now, down here?
Well, normally after A-B-C flat uptrend can resume, but where and when it’s the question? There are a few important rules and guidelines which can help us to determine if the low of C is already bottoming or not. To confirm support in place we want to see a sharp and strong reversal up or impulsive five-wave recovery back above the trendline connected from the February highs and 0.6270 level.

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