FX.co ★ Elliott Wave analysis of EUR/NZD for September 13, 2013

Today's Support and Resistance levels:

R3: 1.6514

R2: 1.6452

R1: 1.6412

Current Spot: 1.6369

S1: 1.6315

S2: 1.6283

S3: 1.6247

Technical summary:

With a break below the important support at 1.6325 we knew that the previous preferred count was incorrect and the alternative count, which I have been showing for the last few days has now become the preferred count. This count tells us, that the C-wave of a large expanding flat correction is still developing. The first target for this C wave is at 1.6247 and we could even see it lower towards 1.6117, where we find a cluster of support. In an expanded flat correction, the A and C wave normally relate to one another with some Fibonacci relationship. And the first comes in at 1.6247, where wave C will be 1.236 times longer than wave A. If we break clearly below 1.6247, the next target becomes 1.6117, where wave C will be 1.382 times longer than wave A.These slightly odd Fibonacci extension target are only used when we are in a correction. Looking at the internal structure of wave C a bottom near 1.6247 we fit the picture nicely, but we need to stay flexible.

Trading recommendation:

The stop at 1.6320 was hit for a loss. The aggresive traders place a EUR buy-order at 1.6255 with a stop at 1.6200. The more conservative trader waits for the market to comitt and places a EUR-buy order at 1.6515 with at stop just below the lowest point before the break above 1.6515.