NZDUSD’s structure looks set to complete yet another leg down to finalize a double zigzag pattern.
The complex structure began at $0.7766 high on February ’21. Since then it formed a correction that could end closer to the 0.618% extension of waves WX near $0.6812.
With the current drop resembling a multi-structural move to the downside, prices might consolidate for a while. Once the internal correction ends, we can expect the pair to fall to lower territories. There a fresh low will likely offer a great reversal opportunity.
Should we receive an impulsive move instead of consolidation over the next few trading sessions, the probabilities of a premature reversal will increase.
In such a scenario, the Y leg from ~$0.73 would be an ending diagonal of the open variation.
With a fresh low already in, traders can expect the swing low at wave (a) to break to somewhat validate the bullish case.
If prices remain below the said swing low, probabilities will remain increased towards the main scenario.
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