FX.co ★ NZD/USD Wave analysis for January 10, 2013

NZD/USD Elliott Wave
For the last few days the NZD/USD pair has traded upwards, corrective (B) wave (coloured red) of the bigger E wave (coloured purple) was developing. Yesterday during the Asian and European sessions we could observe descending movement from 0.8348 toward the 0.9348 level (daily low). Therefore, during the early New York session when this currency pair found support at daily low, the price started pushing higher reaching a new high at 0.8408 level. Today the NZD/USD pair is trading around 0.8407 level and we expect to see the price lower when development of the (C) wave (coloured red) starts. In accordance with our wave rules and taking into account that the wave C should retrace 161.8% of the wave A, we can define the potential targets with measuring wave A with take profit at 0.7911 (161.8% of wave A). To reduce the risk, we can use invalidation at 0.8475 level as stop loss.

Support and Resistance
(S3) 0.8301 (S2) 0.8326 (S1) 0.8360 (PP) 0.8385 (R1) 0.8419 (R2) 0.8444 (R3) 0.8478

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.8400 with stop loss 0.8475 take profit at 0.7911 are recommended.