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The NZDUSD has been an exciting pair to trade lately due to increased volatility.  Increased volatility often signals that a major turn is at hand.  Is this the case with Kiwi?  We take a look monthly, daily, and intraday charts this week to determine which way the Kiwi market is headed.

We are viewing the advance from .5927 as wave B within a large A-B-C correction from the March 2007 high of .7463.  If everything from .7463 is a correction, then the pattern unfolding from .7463 is an expanded flat.  Wave B of expanded flats often end near the 127%-138.2% of Fibonacci level of wave A.  In this case, those levels were .7878 and .8050.  The July high at .8108 was just above the 138.2%. 

This daily chart focuses on large wave B (from .5927 to .8108).  Wave B unfolded as a complex wave (W-X-Y).  Wave X is a rare expanding triangle, which was followed by an a-b-c zigzag as wave Y.  It appears that large wave C is also unfolding in a complex (W-X-Y) manner.  Wave W is clearly a 3 wave decline, as is wave X, which ended just ahead of the 78.6% retrace level of .8108-.6639. 

Once we zoom in on the hourly, we have reason to be bearish near term.  The .7785-.7393 decline is an impulse (meaning 5 waves), indicating that the larger degree trend is down.  Price action since is corrective (a-b-c) and confirms the impulse.  The correction is either complete at .7556 or will be complete on a push through .7556 (notice two corrective counts).  The 61.8% at .7635 is potential resistance on a push through .7556.  Still, evidence favors a bearish bias against .7784.

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