So far this month, the euro has lost almost 900 pips to the U.S. dollar, pushing the EUR/USD forex pair from near $1.44 down into the $1.35 range.
That's a huge, fast move, one that every forex trader hopes to catch.
How many caught this one? Hard to say, but chances are that those who only focused on "fundamentals" missed it. Just take a look at these headlines from late August:
- Euro up on German data as market looks ahead to Fed (Reuters, Aug. 23)
- Dollar slips as data buoy euro, stocks (MarketWatch, Aug. 23)
- US dollar declines as investor risk appetite recovers (Taipei Times, Aug .27)
Meanwhile, the editor of EWI's forex-focused Currency Specialty Service Jim Martens had been warning subscribers all along of one unambiguous outcome for the EUR/USD -- a bearish one. Reason: the bearish contracting triangle Elliott wave pattern forming in the daily EUR/USD chart. Here's what it looked like on August 29:
And here's what the daily EUR/USD chart looks like now:
A contracting triangle "reflects a balance of forces," and this tug-of-war between the bulls and bears has little choice but to resolve in a violent price spike. As one Currency Specialty Service subscriber put it in his recent feedback email,
Submitted on 9/9/2011 4:59:40 PM
Jim: BRAVO! Not just because you were right, but mostly because of your thought process all along. What a lesson, almost 5 months long, but worth every minute of it.
Now that we've seen the anticipated violent price spike, what's next for the USD, EUR, CHF and other forex pairs? Get objective answers now with EWI's Currency Specialty Service >>