FX.co ★ EUR/NZD - Elliott Wave Analysis for October 25, 2012

Today's Support and Resistance Levels:

S1: 1.5762 R1: 1.5817

S2: 1.5704 R2: 1.5854

S3: 1.5635 R3: 1.5884

Technical Overview:

With the break below 1.5906 a more complex correction was unfolding. Then it was a question if it was a minor complex correction to 1.5868 or we would break below important support at 1.5812 too. Looking on the chart it is clear that we have broken below 1.5811 too, which tells us that the wave ii correction from 1.5967 (the top of wave i) is still unfolding. With a b-wave high above the top of wave i we know that we should be looking for an expanded flat correction. In an expanded flat correction the c-leg should end just below the bottom of the a-leg of the correction, which means a break below 1.5701. The most likely target for the ongoing wave c of ii is at 1.5635.
However, in the short term we should see a minor rally towards 1.5854 and maybe even 1.5884 before the final decline towards 1.5635.

Trading Recommendation:

You took profit on your long EUR-position from 1.5725 at 1.5900. As we are looking for a decline to 1.5636 you should sell EUR at 1.5850 with a 1.5930 stop and take profit + reverse your position to a long EUR-position at 1.5650.