[B]NZD/USD at the End of an Impressive Run?
Current Price: .7819
From October 2000 to March 2005, the NZDUSD traced out a clean 5 wave advance. A decline to .5928 and a rally to current levels followed. The structure of the rally from .5928 could be an impulse but the first wave is extended, which is rare. Also, the rally counts better as an a-b-c advance rather than a 1-2-3-4-5 rally. B waves often retrace 100% to 138.2% of wave A in a flat. Another common relationship is 127%. 127% of wave A would be at .7878 and the high this week was at .7879. Within wave B, the rally from .6719 would equal the .5928-.7096 rally at .7863.
On the daily, a pullback looks likely given the divergence with RSI and the fact that RSI is near 75. Potential support is at a short term trendline near .7700. Longer term trendlines are not until .7500 and .7200. Breaks of these trendlines offer bearish opportunities.
The short term picture has been unclear lately but trading this week has traced out a head and shoulders. A break of the neckline, just above .7800 would signal a short term bearish opportunity. Short term support would be at .7761, .7725, and .7689 (38.2%, 505, and 61.8% of .7571-.7879)