What AREN'T You Seeing On the Euro's Price Chart?

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What AREN'T You Seeing On the Euro's Price Chart?
A lesson in how EWI's Elliott Wave Junctures used a Head and Shoulders chart pattern to spot a high-probability opportunity in the euro

By Nico Isaac
Tue, 05 Jun 2012 17:00:00 ET

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Below you see a daily price chart of the euro/us dollar exchange rate ending in mid-April. At the time, "X" marked the spot where the avatar "YOU" should have geared up for a high-probability bearish trading opportunity. The question is, would the analysis you use NOW have enabled you to accurately see that opportunity THEN?

Well, let's say you ascribe to the school of fundamental analysis. On April 17, the euro's event du jour was the Group of 20's decision to increase the International Monetary Fund's resources by more than $400 billion. A BusinessWeek headline writes, "Euro on track for best weekly gain since February on G20 pledge to counter the European debt crisis."

So, "fundamental" analysis would have had you turn near-term bullish the euro in mid-April.

Or maybe you, like many technical analysts, hang your hat on one specific indicator. On April 17, one news site chose the 200-hour Moving Average to inform its near-term euro bias and wrote: "Euro turns positive against the dollar with the single currency's failure to break below its 200-hour MA, a key support level." Again, you would decide the near-term trend was up.

At that same time, in the April 18 and May 4 video lessons of our Elliott Wave Junctures, EWI's senior analyst Jeffrey Kennedy presented to subscribers a two-part series on how the Elliott Wave Principle neatly subsumed an old-school chart pattern -- the Head and Shoulders -- on the euro's price chart. Here is what Jeffrey's chart of the euro (compiled below) brought to light:

A long, clear trendline -- called the "neckline" -- that, if penetrated, would signal the start of a downtrend
A probable level of price resistence for the right shoulder
And, a high-probability price target for the anticipated decline -- via the Head and Shoulders "neckline measuring objective."

The next chart moves forward in time to show you just how well the euro followed the Elliott Wave Junctures' script:

So, now that the euro has fallen to a 2-year low, the question is -- is the single currency due for a rebound or further losses?

Well, in the May 30 Elliott Wave Junctures, Jeffrey Kennedy gives you his latest on the euro. You can watch it online now, but here's the best part: You can get the April 18 and May 4 Elliott Wave Junctures video trading lessons now in the Video Library section of the service -- which now includes over 30 video trading lessons.

Learn how to use Elliott wave analysis and other technical chart patterns and indicators to spot high-probability opportunities in any liquid market. Subscribe risk-free to Elliott Wave Junctures today to watch 30 timeless video trading lessons.

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(But I have some demands!)

1. Must provide real-world trading lessons at least 3-5 times per week that will help me spot and act on high-probability trading opportunities.

2. Must cover all critical aspects for trading success including: strategy and tactics, Elliott wave analysis, technical analysis, multiple timeframes, multiple markets, and more.

3. Must have 20+ years of market experience, taught thousands of students around the world how to improve their trading, and a history of being published in major trading publications such as SFO Magazine and FuturesMag.

4. Must provide on-screen video instructions combined with helpful PDF notes that I can review as many times as I like.

5. Must allow me to test out his lessons risk-free for 30 days and refund me in full if I decide committing to his educational track will not improve my trading.

Sounds like unreasonable (if not crazy) demands? Maybe -- until you discover that this is exactly what EWI's NEW service, Elliott Wave Junctures, does for you.

Learn More About How Elliott Wave Junctures Will Teach You To Spot Trading Opportunities -- Today >>

Tags: Elliott wave, Elliott Wave Principle, Elliott Wave trading, euro, European debt crisis, fundamental analysis, head and shoulders pattern, Jeffrey Kennedy, U.S. dollar

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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.