FX.co ★ Elliott Wave analysis of EUR/NZD for July 8, 2013

Today's support and resistance levels:

R3: 1.6688

R2: 1.6643

R1: 1.6613

Current Spot: 1.6587

S1: 1.6578

S2: 1.6555

S3: 1.6524

Technical overview:

With a decline to 1.6390 and a very powerful rally to follow this drop our scenario has played out almost to perfection. We are now looking for support near 1.6578 to protect the downside for a break above 1.6625, which will confirm the next rally higher. However, we need a break above the resistance line back from the 1.7112 high, which comes in at around 1.6730 to confirm a new rally back to 1.7111 and possibly higher. Even though the rally from the 1.6390 has all the earmarks of an impulsive rally, there is a risk, that it is "only" a new X-wave rally and a new decline will follow, but that is not our preferred count at this point in time.

Trading recommendation:

We are long EUR from 1.6395 and will place our stop at 1.6385 (almost no risk). Upon a break above 1.6625 we will raise our stop to 1.6540. If you are not long EUR already, then buy a break above 1.6625 with the same stop at 1.6540.