FX.co ★ EUR/NZD - Elliott Wave Analysis for October 26, 2012

Today's Support and Resistance Levels:

S1: 1.5777 R1: 1.5813

S2: 1.5739 R2: 1.5844

S3: 1.5697 R3: 1.5884

Technical Overview:

We missed our buying opportunity by only 6 small pips, as red wave iv became a little different in shape, than we first expected. Red wave ii was a combination of simple zig-zags, and therefore red wave iv should be either a kind of flat correction or a triangle. The triangle would likely have taken to long to develop, which is why we did not think it was the best option. Red wave iv most likely ended at 1.5844, which a break below 1.5777 will confirm. However, as long as support at 1.5777 is not broken to the downside, there is a small chance that we could see one last rally higher towards 1.5853 and just maybe even higher to 1.5883 to end red wave iv. Once we break below 1.5777 we know that red wave iv is over and one last decline towards the 1.5635 - 1.5652 area should be seen.

Trading Recommendation:

We will keep our EUR sell order at 1.5850 with 1.5930 stop. Take profit and the possible short EUR-position reverse to a long EUR-position at 1.5860 (10 pips higher than yesterday).