NZDUSD Reverses Lower as Kiwi Breaks Key Trendline Support

Kiwi is reversing quite aggressively to the downside, and notice that price on the 4 hour time frame is currently breaking the trend line support connected from the April lows, so it appears that the three wave recovery is already finished, completed D wave, exactly at our first resistance near the 0.5960 level. The reversal lower that we are tracking now looks like a wave E decline, but we know that wave E should unfold in a minimum of three waves, so it’s very possible that this weakness continues much lower towards the 61.8 percent or even the 78.6 percent retracement levels, located around 0.5750 - 0.58. Those are the next major supports to watch for a potential rebound, but only after we complete a three wave decline from the recent swing highs.

So for now, it still looks like we are only in the first leg of the current selloff.

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