Above there is the AUDNZD cross that is shaping up a bearish setup that most likely started with the last move above 1.07. The idea behind this trade is that the current move should be one destined for parity, so it should be no wonder the take profit is close to that area.
Trading with Elliott Waves should be subject to a price and time analysis, and this is what we’re doing: putting the time element to a price forecast. Not only that price should move to a specific direction, but we should know when that move is going to come.
Most of the times, if the move is not coming in a specific amount of time, the setup should be invalidated. The same here: if the target is not coming until the blue line, the overall trade should be closed. It remains to be seen if it is going to be a losing or a winning one, but when time expires price should either reach the target or the trade should be closed the moment the blue line is reached.
This trade puts the New Zealand dollar in the spotlight as well as it should outperform the Australian counterpart. It doesn’t really matter if the overall Aussie and Kiwi pairs will be bullish or not, as this is a cross that is moving based on the differences between the two majors. This difference should favor the New Zealand dollar.
Trading a cross ahead of a US dollar driven event is important as this is one way to avoid the dollar moves and focus only on the differences between dollar pairs. This is the beauty of trading crosses.
From a technical point of view, the whole patterns seem to be a zigzag formation that should have started the c-wave to the downside and now the five-waves structure should resume. The b-wave seems to be an irregular flat, and the idea behind the trade is that this irregular flat needs to be confirmed.
It remains to be seen if this is the case or not. However, a nice setup is to stay short for 1.0220 with 1.0770 stop loss, as the impulsive move continues South.
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