Forex analysts' attributed the U.S. dollar strength on Monday, June 21, to the "faded optimism" about "China’s vow to add more flexibility in the yuan’s fixed exchange rate." (Bloomberg BusinessWeek).
From an Elliott wave perspective, it's a very apt description. Price fluctuations in forex markets reflect changes (or "waves") in traders' collective optimism and pessimism. Those changes come in patterns, Elliott wave patterns, which makes them predictable. Monday's "faded pessimism" was no exception.
Update For: Monday
Posted On: Sat, 19 Jun 2010 22:37:25 GMT
EURUSD Last Price: 1.2387
[Rolling over] The euro recovery from 1.1876 still looks corrective... A non-impulsive recovery to resistance suggests the euro remains vulnerable.
Jim Martens reiterated that bearish EUR/USD forecast in the June 21 intraday update, posted at 10:12 AM Eastern on Monday. Shortly after, the USD got stronger and pushed the EUR/USD lower by almost 100 pips.
Currency Specialty Service latest analysis suggests that, "If the EUR/USD decline extends to five waves, we'll have evidence that the recovery is complete and the euro is headed lower."