Question: If you knew with 100% certainty that a specific event would happen on a specific future date, would you be surprised when the event actually happened?
Common sense says "no." Yet, recent mainstream news stories on the euro would have you believe otherwise. Check it: On Wednesday September 7, the euro gained ground in a late-day rally. And, according to the usual experts, one main fundamental "influence" on the euro was scheduled to arrive the very next day:
"The next big event will be the European central Bank's September 8 meeting. Officials are widely expected to signal an end to its current rate hike cycle."
On September 8, European Central Bank President Jean-Claude Trichet did exactly what was "widely expected" of him -- namely, he left interest rates unchanged and suggested an end to further hikes for 2011. YET -- in the wake of the announcement, the euro dropped to a two-month low. Popular headlines wrote: "Euro Sinks on Trichet" (AP)
Try this: The euro's recent decline makes perfect sense, when examined under the lens of Elliott wave analysis.
EWI's Currency Specialty Service has been tracking a contracting triangle pattern in EURUSD for subscribers over the past several weeks. The euro’s drop falls in line with expectations and on September 7, Currency Specialty Service presented a compelling chart of the euro that showed prices unfolding in a down leg of the five-wave pattern.
If you're new to Elliott waves, here's is a brief definition and diagram of a contracting triangle:
"Contracting triangles, or 'horizontals,' contain five-overlapping waves that subdivided 3-3-3-3-3 AND are labeled A through E. When a triangle ends, prices usually spike in the direction of the larger trend.
The latest Currency Specialty Service updates give you more crucial details. Get the full story now >>