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EUR/USD Falls, But Don't Blame the European Central Bank
The ECB did reduce the key interest rate to a record low 0.75% -- but that's NOT why the euro weakened on July 5
By Vadim Pokhlebkin
Fri, 06 Jul 2012 00:15:00 ET
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On July 5, the European Central Bank reduced interest rates to .75%, a record low. In theory, that makes euro-denominated assets less attractive to investors. Hence the drop in the value of the euro against the U.S. dollar to a 1-month low on July 5th, said the pundits. 

Except that, the ECB rate cut was not why EUR/USD fell on July 5.
 
Elliott wave patterns in EUR/USD charts warned as early as Tuesday, July 3, that EUR was about to fall hard -- potentially in a devastating 3rd wave.
 
Update For: Wednesday/Thursday, July 4/5
Posted On: Tue, 03 Jul 2012 14:57:51 GMT
EURUSD Last Price: 1.2605
 
[Topping] The impulsive but incomplete decline from near 1.3500 and the corrective recovery during the first three weeks of June dictate a bearish outlook. From below 1.2744, and ideally below 1.2693, the euro should resume its decline.
 
 
Our Currency Specialty Service made this forecast two days before: the ECB July 5 meeting; China's rate cut; the Bank of England vote to restart its quantitative easing program; the hopeful U.S. unemployment report… Two days before any of that happened, EUR/USD Elliott wave patterns warned of a decline. You may wonder how that's possible -- here's how.
 
Elliott wave patterns reflect the market's prevailing mood. On July 3, when the forecast you see above was made, the EUR/USD pattern for the whole month of June looked like a big sideways correction. The verdict was: Expect the resumption of the downtrend -- news or no news.  

While Elliott won’t work every time, isn't it better than guessing about the impact of this or that "fundamental" factor? Find out where EUR/USD is likely headed next -- before the news >>


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Tags: Bank of England, Elliott Wave trading, euro, euro/USD exchange rate, european central bank, forex, forex trading, quantitative easing, U.S. dollar
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