FX.co ★ NZD/USD analysis for January 17, 2013

NZD/USD Elliott Wave
In the last few days the NZD/USD pair was trading sideways, impulsive 1 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. Yesterday, during the early Asian session we could observe descending movement from 0.8409 toward the 0.8365 level and we can consider this move as the end of the 1 impulsive wave (coloured blue). Therefore, during the European and New York sessions development of the corrective wave 2 starts price started pushing higher reaching a new daily high at 0.8425 level (end of the 2 wave). At the moment the NZD/USD pair is trading around 0.8395 level and we expect continuation of the bearish movement today. In accordance with our wave rules and taking into account that the wave 3 should retrace 261.8 % of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 0.8234 (261.8% of wave 1). To reduce the risk, we can use invalidation at 0.8440 level as stop loss.

Support and Resistance
(S3) 0.8339 (S2) 0.8363 (S1) 0.8377 (PP) 0.8401 (R1) 0.8425 (R2) 0.8439 (R3) 0.8463

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.8380 with stop loss 0.8440 and take profit at 0.8234 are recommended.