Elliott Wave InternationalmyEWISocioniomics.Net
Home > Currencies
EUR/USD Dips Below $1.30
Was Mario Draghi's speech a bullish or bearish event for the euro? How about BOTH?
By Vadim Pokhlebkin
Mon, 07 May 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

We've shown you before examples of how easy it is to interpret the same event as both bullish and bearish news for a market. Here's a fresh example.

On May 3, the European Central Bank met to talk about interest rates. At that meeting, the ECB's chief Mario Draghi "gave a more upbeat assessment of the euro zone economy than expected." (Reuters)
 
Question: Was that a bullish or bearish event for the euro? Well, how about both? See for yourself:
 
  • "Euro recovers as Draghi dampens easing hopes" (Reuters‎, May 3)
  • "Dollar recovers after Draghi comments" (MarketWatch, May 3) 
The reason why "fundamental" analysis can be this "flexible" is because often, you truly can argue -- and quite logically -- for the opposite market outcomes using the same news event. It all depends on which bias, bullish or bearish, you have yourself.
 
Technical analysis can help you make forex forecasting a lot less murky. While the mainstream pundits were deciphering the meaning of the ECB statement, our own forex-focused Currency Specialty Service made this May 3 forecast -- one based strictly on the objective metrics of Elliott wave analysis:
 
EURUSD (Intraday)
Posted On: May 3 2012 9:18AM ET / May 3 2012 1:18PM GMT
Last Price: 1.3169 
 
 
Correcting [upward], then lower. EURUSD reached the measured objective for wave (3), where it equaled 1.618x wave (1). Though starting off suddenly, we view the current rise as a correction. If it's wave (4), the 1.3200 area should offer resistance. Continue to look for weakness from beneath 1.3204...in a potential 3rd wave lower. 
 
That "3rd wave lower" came in spades the very next day, when on May 4 a jaw-dropping decline took EUR/USD from near $1.3200 to below $1.3000 late on May 6, during the Asian forex session.
 
Since then EUR/USD has recovered somewhat. But you don't have to wait for the next round of news from Europe to know where the euro should go next. 

Our Currency Specialty Service has objective Elliott wave forecasts for you right now.


 
With Currency Specialty Service, you get 24-hour-a-day analysis and actionable forex forecasts for 12 most-traded forex pairs.
 
 
 
 
 
 
 
 
 

Tags: Elliott wave, Elliott Wave trading, euro, euro/USD exchange rate, european central bank, European debt crisis, european markets, eurozone, forex, forex trading, online trading, Swiss franc, technical analysis, U.S. dollar, usd/jpy
Rating: - based on [6 rating(s)]
Rate this content:
  

 
EWI's Event Calendar
Aug. 15-17       

San Francisco Money Show

Nov. 10-13      

New Orleans Investment 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


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.