Today's Support and Resistance Levels:
S1: 0.8131 R1: 0.8154
S2: 0.8112 R2: 0.8167
S3: 0.8101 R3: 0.8181
Technical Overview:
We have now seen the first minor five wave decline from the 0.8223 high, which first of all confirms that the corrective rally from 0.7458 is over, but at the same time it warns us, that we shall see more declines once the correction from 0.8120 is over. As we know that the minor rally from 0.8120 is a correction, we will try to pin-point the end of this correction to our best. The first point we will look for is the ending point of wave four of a lesser degree, which is at 0.8164 and then the common Fibonacci retracement points. Wave two retraces more often between 50 - 61.8% of wave one which will make the next levels 0.8167 (50% retracement of wave i) and 0.8181 (61.8% retracement of wave i). Once this wave ii is over, we expect a powerful and dynamic wave iii down to at least 0.8060 (where wave iii will be equal to wave i) and more likely 0.7993 (where wave iii will 1.618 times wave i).
Trading Recommendation:
You should be short NZD against USD from 0.8155 with 82.25 stop. If you are not short NZD already then sell at 0.8165 with the same stop.
