FX.co ★ Elliott Wave Analysis of EUR/NZD for February 22, 2013

Today's Support and Resistance Levels:

S1: 1.5730 R1: 1.5796

S2: 1.5684 R2: 1.5850

S3: 1.5640 R3: 1.5909

Technical Overview:

With the break below 1.5838 we know that the extreme time-extended correction since September 2012 is not over yet and more downside can be expected. But what is this monster? The best way to describe it is to suppose that it is an expanded developing triangle, and if this is the case we need one more new low below 1.5390 to finish wave e of the triangle. The ideal target for this e-wave is likely near 1.5176, but it could extend all the way down to 1.5032. Not only are we looking at a major expanding triangle's development. From the 1.6359 we have likely been developing an expanding ending diagonal, which also calls for one last decline towards 1.5176. Short term we will be looking for one more decline towards 1.5682 to end wave a of red e followed by a correction in wave b of red e higher towards 1.5849 and then the final extended decline in wave c of red wave e down to 1.5176.

Trading Recommendation:

We were stopped out with a nice little profit yesterday. We will not run after this market right now, but wait for the correction towards 1.5849 before selling EUR. Therefore, we will place a EUR sell order at 1.5840 with a stop at 1.5950.