FX.co ★ Elliott wave analysis of EUR/NZD for May 3, 2013

Today's support and resistance Levels:

S1: 1.5306 R1: 1.5360

S2: 1.5271 R2: 1.5397

S3: 1.5252 R3: 1.5448

Technical overview:

Due to the rate-cut from ECB, the price action has been more extreme than we expected yesterday. We saw a slightly higher high at 1.5575, not quite the 1.5601 we were looking for, but it gave us an impulsive rally from 1.5252, which we view as wave (i) of iii. The ongoing wave (ii) of iii has allowed to correct all of wave wave (i), but not a single pip below. So, important support at 1.5252 will have to hold or our bullish call is invalidated. We are looking for a bottom in the 1.5300 - 1.5310 area followed by a break above resistance at 1.5360, which will be the first good indication that wave (ii) is over, while a break above resistance at 1.5397 confirms the bottom for a move higher towards 1.5448 and 1.5575.

Trading recommendation:

Our stop at 1.5380 was hit for minor profit, but we will buy EUR again here at 1.5325 with a stop at 1.5250.