26.07.201210:34 Forex Analysis & Reviews: EUR/NZD - Elliott Wave Analysis for July 26 - 2012

Today's Support and Resistance Levels: 

S1: 1.5289                    R1: 1.5372

S2: 1.5262                    R2: 1.5441

S3: 1.5222                    R3: 1.5505

Technical Overview:
After registering an important low at 1.5131 for the decline, not only from 1.6969 but also from 1.9315 high in March 2011, we should now see a major rally back towards 1.6969 as the first major resistance.
In short-term this new rally is in its infant start and looking at the minor rally from 1.5261 to 1.5443; the following correction has been rather deep, which does open up for two possible scenarios.
The first scenario is shown on the chart above, which counts a series of wave one and two. If this scenario is the correct, one we should soon see a rally above minor resistance at 1.5372 and more important above the minor high at 1.5443 for a continuation towards at least 1.5587.
The second scenario calls for a break below 1.5261 for a move closer to 1.5220 in an expanded flat correction for red wave ii, before the next powerful rally in red wave iii sets in for a rally towards at least 1.5654.

Trading Recommendation:
You should be long EUR against NZD from 1.5250; 1.5265 or 1.5295 with a 1.5125 stop. If you are not long EUR already either buy at 1.5230 or a break above 1.5372 (buy at 1.5380) with the same stop. Once we break above 1.5510, lift stop to 1.5250.