Today's Support and Resistance Levels:
S1: 1.5570 R1: 1.5687
S2: 1.5544 R2: 1.5759
S3: 1.5434 R3: 1.5802
Technical Overview:
The failure to overcome resistance at 1.5802 and the fact that we have seen a break below the base mid-line channels and now are testing the base channel support line is of concern. A break below the channel of support line will change our count, but as long as the support line stays intact, we will keep the bullish count as seen above, but we are very cautious with this count.
If we do see a break below the support line channel at 1.5570, we will conclude that the first impulsive rally from 1.4968 ended at 1.5902 and that we are now looking for a correction in wave 2, which could fall to 1.5434 where it would have corrected 50% of wave 1 and maybe even continue down to 1.5323, where it would have corrected 61.8% of wave 1.
Trading Recommendation:
As we are facing strong support at the base channel support line here at 1.5570, it would be tempting to buy EUR against NZD, but the indicators tell us that the risk of a break below the support line is too big and, therefore, we will wait to see if it holds and then buy a break above 1.5802 or if the support line breaks then buy EUR at 1.5350 (one orden done cancels the other).
