Elliott Wave InternationalmyEWISocioniomics.Net
Home > Currencies
Why the Euro Gained: NOT What Most People Think
For a forex market to move, no trend-shaping "events" are needed
By Vadim Pokhlebkin
Wed, 25 Jul 2012 17:30:00 ET
Add to Facebook Add to Twitter Email to a friend Printer Friendly Get the RSS feed Add to more social media services
Get investable insights sent to your inbox at least once a week – for free. Challenge the way you think about investing with The EWI Independent. Privacy

July 25 -- The U.S. dollar backed off a two-year high and the euro bounced on Wednesday after a European Central Bank policy maker said he sees some arguments in favor of allowing the euro zone’s permanent rescue fund to apply for a banking license.

After hitting a low of $1.2047 on July 24, on July 25 EUR/USD rose as high as $1.2162 -- a healthy 115-pip gain. But here's why it had nothing to do with the ECB.
 
Late in the evening on Tuesday, July 24 -- several hours before that allegedly bullish comment by the ECB policy maker -- the editor of our forex focused Currency Specialty Service Jim Martens posted this bullish EUR/USD forecast: 
 
Update For: Wednesday, July 25
Posted On: Tue, 24 Jul 2012 22:12:12 GMT
EURUSD
Last Price: 1.2056

 
[Forming a bottom] The euro fell to new lows and toward the 1.2022 target, where wave v would equal wave i.  The impulsive decline from June sets the stage for a recovery.
 
At this point, you may wonder... If the rally in EUR/USD was in the charts before the event that allegedly set it off -- why then did the media pin the rally on that event?
 
The answer is shockingly simple: Because it "fit" the price action in EUR/USD.
 
There may have been any other "event." Heck, there could have been no events, period! Then the mainstream explanation for the euro rally would have been something like, "The euro rose on hopes that the European contagion will be stopped."
 
Here's the main point of the chart you see above: On July 24, the collective bearish psychology of EUR/USD traders got stretched to the limit on the downside. It was evident in the finished 5-wave falling pattern on EUR/USD charts.
 
Elliott wave analysis says that once a 5-wave move is done, you should expect a 3-way move in the opposite direction.
 
That's the entire basis of our bullish July 24 EUR/USD forecast -- and forecasts to come.
 

Last Chance:

Until 5 p.m. Eastern on July 31, Get Your 5 Top FX Video Forecasts -- FREE 

Yes, you do have time to watch EWI Senior Currency Strategist Jim Martens' video forecasts during the free event for forex traders, How to Trade the Top 5 Forex Opportunities Right Now.
 
Once you join in, you get instant access to these 5 video forecasts:
 
Video 1: AUD/USD - 12 min

Video 2: EUR/USD - 7 min

Video 3: USD/CAD - 9 min

Video 4: USD/JPY - 8 min

Video 5: GBP/USD - 19 min

Here's just a few of the comments by other Free FX Trading Event participants: 

"I enjoyed the video. It was very informative and I intend to put these strategies into my trading plan." - Bill G.

"I love the real time analysis because this is something that I am actively analyzing on my own. I enjoy reanalyzing my work, disagreeing with the analysis, and adjusting my own perspectives. A great learning tool." - Ken L.

"An excellent, well-presented, clear and concise explanation on Elliot Wave basic theory. Many thanks." - David T.

"As an Elliott Wave novice, this is just what I needed to add to my strategy." - Lloyd W.

"This is an excellent presentation. There are very few and far between presentations out there that capture what is happening now in the market." - Charles

Join our Free FX Trading Event now -- before your free access to the videos ends at 5 p.m. Eastern on July 31.

Take advantage of this unique opportunity to learn how to apply Elliott wave analysis to real-time forex opportunities.

Join thE free FX Trading event noW >>

 

 

Tags: Elliott Wave trading, euro, euro/USD exchange rate, european central bank, forex, forex trading, technical indicators, trade targets, Traders, trading lessons, U.S. dollar
Rating: - based on [19 rating(s)]
Rate this content:
  

 
EWI's Event Calendar
May 13-16     

Las Vegas Money Show

July 10-13       

Freedom Fest Conference




FFS

EWI's Currency Specialty Service delivers 24-hour-a-day coverage of the world's most traded currency pairs so you'll know every Elliott wave implication of every market move. Subscribe now and get instant access to actionable forecasts for:

EUR/USD         USD/JPY
GBP/USD
USD Index 
USD/CHF        USD/CAD 
AUD/USD
EUR/GBP
EUR/JPY
EUR/CAD
GBP/JPY
AUD/JPY
 

Discover what a team of Elliott wave experts can do for your forex trading>>


Free 14-page eBook


Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success

EWI's Senior Currency Strategist Jim Martens pulls from 25+ years of experience using Elliott wave analysis to show how you can put the power of the Wave Principle to work in your forex trading.
Download Trading Forex free.

*Currencies


© 2013 Elliott Wave International

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.