EURNZD short on dovish ECB and hawkish RBNZ
Updated
Apart from what's said in the title, the pair has completed an impulse as minute wave iii of minor 3 and is now correcting price in wave iv. This correction looks likely to be a smaller 7 waves swing (wxy) and I will trade it as it hits structural resistance around 1.6350 or i(f that move doesn't materialize) on break of 1.6238 low (x on chart). I will also monitor weather this last wave higher is divided in to 3 or 5 sub waves, which in the latter case would mean that the correction is an abc rather than a wxy, in witch case I would enter at a higher price instead (or add in case already in the trade).
Note
We broke below (x) but I didn't take the trade due to the divergence on 15m and no close below. So waiting to see if we will get a more sustained reaction or jst a small flag to sell in to.s3.tradingview.com/snapshots/t/tyCqsWfT.png
Note
Well that was a misjudgement and a mistake, at least short term. Anyway, we can now conclude that wave (iv) is in and I'm looking to sell any decent pullback here, preferably into wave iv targeting the 1.61614 low. That low is rather important, as if it isn't taken we will have a Daily Inside Bar (a continuation pattern) pointing to more downside, even if we get a sized pullback. If it's broken today, well then we can soon find price another 100 pips or so lower, quite fast.Note
Important to follow Price Action (PA) and structure to conclude if 23.6% fib is too early to sell or not. While a retest of the Pitchfork bottom is possible, I'd prefer a more shallow pullback (to 23.6) as that also would be a sign of bearish strength. Also, as it's a wave iv, and wave ii was sharp, it "should" be of a more choppier overlapping nature or it may be an indication that something else is developing.Trade active
Took the short at 1.6213, small size only as we may get a trip to 38.2 still.Trade closed manually
Closed my small size trade as price wasn't able to penetrate support and it seems like blue wave iii has come to an end. Waiting for pullback up into previous wave (iv) to enter again.Trade active
I took multiple short positions into the pullback, ranging between 1.62-45, with more orders higher at the structure top in case we come back up. But I don't to miss when this one starts to move for real so better to be in early but small as a base to build on. Watching to see if it manage to break through the support zone on next try, or I will cover and start over again.Note
I added a few more short on the pullback up in that wave c of (iv) and have a fairly high conviction that was it for the EUR (unless we get new unrealistic calls for ECB hikes in 2022) this round. Price still has some work to do though before it can break below the support zone between 1.6140/65 and maybe we have to wait for RBNZ in the middle of next week, or maybe not.If we break and close below that level, I'd look to add even more on a successful retest of the level as that would open up for a move to at least 1.5685, the 0.618 extension of start of wave (i) to end of wave (iii), which at the same time is roughly the same length on wave (v) as of wave (i). The EW guidelines project this extension as the minimum price target, so there is potentially room for more.
Note
Let me clarify and improve the last sentence above: The EW guidelines project this extension as the minimum price target for a wave 5 when wave 3 is longer than wave 1, but shorter than 1.618 of that wave. So there is potentially room for even lower prices in such case.
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