FX.co ★ EUR/NZD - Elliott Wave Analysis for October 12 - 2012

Today's Support and Resistance Levels:

S1: 1.5754 R1: 1.5785

S2: 1.5715 R2: 1.5840

S3: 1.5684 R3: 1.5914

Technical Overview:

Looking at the rally of the 1.5700 low we might conclude it looks like a simple zigzag correction before the next decline lower, but we do not see it in this way. We think that we are looking at a series of waves one's and two's, which should soon turn into a series of wave three's much higher. The good thing is that we know exactly when this count is wrong. A break below 1.5715 will tell us that the rally of the 1.5700 low was indeed a simple zigzag correction and we should look for a lower low near 1.5684.
However, if support at 1.5715 is not broken and we saw but we a break above 1.5819 instead, then we have the first sign that the next powerful rally is underway; while a break above 1.5850 confirms that wave iii of 3 is well under way.

Trading Recommendation:

You should be long EUR from 1.5725 and you can lift your already tight stop up to 1.5710.