EURNZD MONTHLY CHART
ADVANCED PURE PRICE ACTION ANALYSIS
Advanced PURE PRICE ACTION ANALYSIS involves the following as we had discussed in our previous article
- Current status
- Analysis of the major swings on the pair and how long they have been lasting
- Analysis of the corrective moves and how long they have been lasting
- General conclusion and current probable status
Current status
The price was in a good downtrend since the beginning of 2009 indicated by Lower highs(LH) and Lower lows(LL) until a higher high(HH) was formed in early August 2015 which was then followed by a higher low(HL) early this February 2017. This was an indication of weakness in the bears and catch up by the bulls which can all result into a large reversal to form new highs at R
Analysis of major wings
The major swings are marked with purple and green lines. They have been averagely lasting 6 months covering over 4600 pips. As compared to previous downswings the average down swing is completed and next likely move is another major upward swing(purple arrow). Will give more reasons in the next chapters below. Like i mentioned in previous articles, Analysis of major swings helps you not to get out of trend too early or too late.
Analysis of Corrective moves
I have marked the corrective moves with a red ellipse. Most 2 waves lasting 9 months. Observing how long these congestion zones helps not to enter the major swing trades too early or too late and the timeframes to trade on during different market phases
General conclusion and probable status
Comparing the current status discussed above with what happened in the start of 2008 where i have marked with a SOLID GREEN arrow in the chart, that's the kind of action that is likely to happen. In both scenarios,We can see a shift in strength and sentiment from sellers to buyers indicated by the HH then followed by a HL
So now we will wait for confirmation of bullish candle above trendline T quite like the March 2008 candle on the chart that confirmed movement to new highs.
Monthly candle close above trendline T may lead price into resistance zone marked R around 1.88816
