FX.co ★ Elliott wave analysis of EUR/NZD for May 10, 2013

Today's support and resistance levels:

R3: 1.5717

R2: 1.5658

R1: 1.5639

Current spot: 1.5601

S1: 1.5580

S2: 1.5560

S3: 1.5535

Technical overview:

After a little detour to 1.5482 red wave ii finally found its bottom and we should now be in red wave iii higher. This red wave iii is expected to be very powerful and resistance at 1.5658 and at 1.5717 should not cause any trouble once this wave really gets going. The target for this red wave iii is expected to be near 1.6142 and red wave iv should be a shallow correction to 1.5985 with a possibility of a deeper correction down to 1.5885 before the next powerful rally higher to 1.6299 in red wave v, which just ends wave (iii). In the longer term we expect this rally to rally much higher and should at least see 1.7000 tested. However, we would not be surprised to see a continuation higher towards 1.9571 over the next many months.

Trading recommendation:

We long EUR from 1.5550 and move our stop higher to 1.5480. If you do not have long EUR positions, then buy EUR near 1.5560 or upon a break above 1.5639.