Macron Wins and the Euro... Falls? Excusez-moi!
See why the move which "nobody expected" was exactly what Elliott wave forecasts called for
by Nico Isaac
Updated: May 10, 2017
Take a look at the following chart of the EURUSD's recent performance -.
The "You Are Here" arrow points to May 5, two days before the French Presidential election.
At the time, early reporting polls showed Emmanuel Macron beating out "far-right" Marine Le Pen. And it's the exaggeration of the decade to say euro bulls were happy about the expected -- and then realized -- Macron win on May 7. Here, these news items following the official results capture the sentiment:
- "Macron: The Reason to Go Long the Euro" (Seeking Alpha)
- "Macron Victory Opens New Path for Euro" (Wall Street Journal)
- "The Macron victory should continue to boost the currency as political concerns fade... Fewer investors are now shorting the euro than at any time in the past three years, according to data from the U.S. Commodity Futures Trading Commission." (CNBC)
So, what happened? Other than a pop at the open Sunday, the euro went on to confound to the downside. Wrote a May 8 CNBC:
"The euro just did something that few expected. Everybody was expecting a pretty bullish move following the election. But Macron's election appears to have been a 'sell the news' event for traders."
"Sell the news"? Yeah, that's just a fancy euphemism for, "Surprise, surprise."
As for the other part, the "everybody" expecting a bullish move -- we beg to differ. See, on May 5, our Currency Pro Service analyst Jim Martens took a very unpopular stand on the euro's near-term trend; namely, a bearish one. Here, Jim wrote:
"EURUSD hasn't budged and might not until after the French election. From our point of view, it is positioned to fall. It's premature to confirm a final top is in place, but it appears EURUSD should turn lower from not much if any above current levels."
"Positioned to fall"! And, the next chart shows how the euro did just that.
What's next for the euro? Well, you could wait to "buy" or "sell" the news -- after the fact. Or, you could see right now what critical price level Jim Martens has identified for his Currency Pro Service subscribers that would keep the euro "accelerating" downward.
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