The U.S. dollar moved sharply to the upside on Friday after the nonfarm payroll report, but moves were not so significant against some majors. EUR/USD (FOREX:EURUSD) per example is still above the 1.3290 low while AUD/USD (FOREX:AUDUSD) and some other commodity currencies seems to be much weaker.
Today, we are looking at NZD/USD (FOREX:NZDUSD), which seems to be bearish for wave E) to complete a weekly triangle. So if wave E) is going lower, then short term opportunities could be on lower time frames. On the 4h chart we see five waves down and three up to 0.9413 where the rally looks completed after recent broken trend line that is now pointing for decline to a new low and possible even to 0.8100 in this week. Any taken shorts on this pair should have stops above 0.9400.
Elliott Wave Education: Triangle Pattern
A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.
• Structure is 3-3-3-3-3
• Each subwave of a triangle is usually a zig-zag
• Wave E must end in the price territory of wave A
• One subwave of a triangle usually has a much more complex structure than others subwaves
• Appears in wave four in an impulse, wave B in an A-B-C, wave X or wave Y in a double threes, wave X or wave Z in a triple threes