Scanning forex news headlines this morning (Dec. 3) on four major online news agency websites, I didn't see a single one about the U.S. dollar. The British pound, yes. The euro, yes. The Japanese yen, more than one. But nothing about the greenback.
And it's no wonder, because the dollar has been stuck. For example, all this week, the euro-dollar exchange rate, EURUSD, has traded roughly between $1.26 and $1.27, a hundred-pip range. And, if you look at a longer-term EURUSD chart, you'll see that the pair has been moving sideways since late October.
Elliott wave is a contrarian trading method. News headlines, on the other hand, focus on what's popular, which by definition makes them a perfect reflection of the majority opinion. To a contrarian forex trader, the fact that the media is quiet about the dollar means one thing: Something's about to happen in this market.
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And if you're not only a contrarian, but also an Elliottician, you understand what is likely to happen, too. Regular readers of our Free Updates on currencies know that over the past few weeks, we've said more than once that the EURUSD has likely been building a large triangle.
That hasn't changed. In fact, last night's daily EURUSD forecast inside our Currency Specialty Service reiterated that point again. It also showed this chart, among others (some Elliott wave labels have been erased for this publication):
A triangle is a corrective wave formation that appears when the market is “at a loss” for direction. If our analysis is right, when this triangle finally resolves, we should see a large and volatile move in the USD. It's time to start paying attention to this market.