FX.co ★ EUR/NZD - Elliott Wave Analysis for August 13 - 2012

EUR/NZD Daily

EUR/NZD 4 Hourly

Today's Support and Resistance Levels:

S1: 1.5122 R1: 1.5164

S2: 1.5091 R2: 1.5197

S3: 1.5084 R3: 1.5216

Technical Overview:
First, looking at the larger picture, we can see that the decline 1.9570 has been a major diagonal ending, which we believed finished with the test of 1.4965. The decline to 1.4965 caused a small decline below the diagonal ending of support line, which was quickly reversed and is very common at major turning points. However, the decline from 1.9570 has also been in five overlapping waves, which is why this is the diagonal ending.
When zooming in on the last part of the decline from 1.6969, we can see that the decline here also was performed in five waves and with the break above the downtrend line. We favor that an important low is in place at 1.4965. The minor rally from 1.4965 up to 1.5200 does look impulsive which also adds confidence in our view that and important bottom is in place. In short term we still see the possibility for a move lower towards the 1.5035 - 1.5050 area before a break above 1.5200 eases the downside pressure for a rally in red wave iii towards resistance at 1.5439.

Trading Recommendation:
We recommend buying EUR against NZD at 1.5055 or upon a break above 1.5200 (buy at 1.5210). One order cancels the other. Stop should be placed at 1.4960