Tuesday, July 30, 2013
Elliott wave analysis of EUR/JPY and EUR/NZD
We saw the end of minor wave five at exactly 129.59, which was my first target. The rally of the low at 129.59 indicates, that wave i of c is over and that wave ii is developing. It is most likely that this wave ii will retrace a great part of wave i, so I would expect to see a correction of 61.8% of wave i, which will take us to 131.54 before wave ii might be over. However, as second waves are allowed to correct all of wave the first wave we could see a move closer to the 132.74 top, but under no circumstances can a break above the start of wave i at 132.74 be allowed. Once this ongoing wave ii is done I will be looking after a powerful decline in wave iii, but first let's concentrate on wave ii higher.
With the break above 1.6486 we had confirmation, that a bottom is in place for a new impulsive rally higher. To confirm, that we have seen an important low for wave ii I would like to see a break above strong resistance at 1.6686 as well, as that will confirm continuation higher towards 1.6818 and 171.13. Short term I'm looking for support at 1.6527 and important support at 1.6482, which ideally protect the downside for the rally towards 1.6686 and higher.