BarroMetrics Views: US$ - Bear Market Rally or Start of New Up Trend? (III)
Today we’ll have a quick look at the NZDUSD - its pattern is almost exactly the same as the AUDUSD.
Figure 1 is the long-term, monthly chart. The key question is whether the bottoming pattern is complete. We won’t see confirmation of that until we accept above .8175 and until it does occur, it is quite possible we will see a congestion area form between:
- .8175 to .4923 OR
- .8175 to .3920 OR
- .8175 to .3257 (Maximum Extension of .8175 to .3920).
Turning to the 18-day trend (monthly trend) - Figure 2
The first thing to notice is there are no Lagging or Forecasting Change in Trend Patterns (see Nature of Trends). This makes it unlikely that an 18-day change in trend has occurred.
Secondly, the area shaded in yellow is minimum retracement I expect to see. The minimum retracement date range is Jan 6 2010 to Feb 15 2010. So, we can say that I expect the NZ to retrace to at least .67 to .6550 around the first quarter of 2010.
The more the NZDUSD drops below the minimum retracement levels, the greater the probability that a congestion market will form between .8175 and one of the lows above. On the other hand, if the minimum retracement levels hold, the higher the probability that we will see acceptance above .8175.
FIGURE 1 NZDUSD Monthly
(Chart through the courtesy of The Chart Store)
FIGURE 2 NZDUSD 18-day Trend
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