FX.co ★ NZD/USD Wave analysis for January 04, 2013

NZD/USD Elliott Wave
This week the NZD/USD pair was trading in an upward movement, corrective (B) wave (coloured red) of the bigger E wave (coloured purple) was developing. Yesterday during the Asian and European sessions we could observe strong ascending movement toward the 0.8350 level and we can consider this move as the end of the corrective (B) wave. Therefore, during the early New York session when development of the final C wave started this major pair began pushing lower reaching 0.8270 level. At the moment the NZD/USD pair is trading around 0.8230 level and we are expecting to see continuation of the bearish mood in the next few days. In accordance with our wave rules and taking into account that the wave E should retrace 61.8% of the wave C, we can define the potential targets with measuring wave C with take profit at 0.7848 (61.8% of wave C). To reduce the risk, we can use resistance at 0.8355 level as stop loss.

Support and Resistance
(S3) 0.8170 (S2) 0.8220 (S1) 0.8250 (PP) 0.8300 (R1) 0.8330 (R2) 0.8380 (R3) 0.8410

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.8210 with stop loss 0.8355 and take profit at 0.7848 are recommended.