04.07.201212:54 Forex Analysis & Reviews: EUR/NZD - Elliott Wave Analysis for July 4 - 2012

Today's Support and Resistance Levels:
Support Resistance
1: 1.5600 1: 1.5694
2: 1.5581 2: 1.5723 (low of pink wave i - Should not be broken due the overlap rule)
3: 1.5533 3: 1.5823

Technical Overview:
We are in the very final part of the decline from 1.6969 and even more important, from 1.9511. The ideal target for this final decline is near 1.5533, from where a new rally is expected.
It is obvious from the chart above that wave v of the decline from 1.6969 extended and therefore, we should expect a powerful rally once the final low is in place. Why is a bottom near 1.5533 expected? Normally we should expect some kind of relationship between wave i through wave iii and wave v. At 1.5533 wave v will be 1.618 times longer than the decline from the top of wave i at 1.6969 to the bottom of wave iii at 1.6347.
Looking at the extended wave v, we can see that the red wave v will be 0.382 times longer than the decline from the top of red wave i at 1.6541 to the bottom of red wave iii at 1.5662 at 1.5547. Finally, looking at red wave v, we can see this wave evolving into a five wave decline (pink waves). The relationship between pink wave v and wave i - iii calls for pink wave v to end near 1.5522. We can see a cluster of supports in the area from 1.5522 - 1.5547, which ideally should mark the final low for the long term decline.

Trading Recommendations:
So, how do we trade this cross? We are trying to catch a few pips selling EUR against NZD. Therefore, buy EUR at 1.5555 with a 1.5490 stop or buy a above the break of 1.5723 (buy at 1.5730) with a stop just a tick below the lowest traded price.