FX.co ★ NZD/USD analysis for January 21, 2013

NZD/USD Elliott Wave
Last week the NZD/USD pair was trading downward, impulsive 3 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. During the Friday's Asian session we could observe descending movement from 0.8374 toward the 0.8333 level. Therefore, during the European and New York sessions this commodity pair did not manage to hold bearish mood and the price started traded side-ways. Presently the NZD/USD pair is trading around the 0.8326 level and we expect continuation of the bearish movement from last week continues soon. 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 0.8381 level as stop loss.

Support and Resistance
(S3) 0.8286 (S2) 0.8310 (S1) 0.8334 (PP) 0.8358 (R1) 0.8382 (R2) 0.8406 (R3) 0.8430

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.8350 with stop loss 0.8381 and take profit at 0.8234 are recommended.