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EUR/USD: Nowhere Fast?
How Elliott wave analysis helps you identify the forex trend in several simple steps
By Vadim Pokhlebkin
Wed, 21 Mar 2012 16:00:00 ET
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Today's euro-dollar exchange rate hovers near $1.32. That's the same price point where EUR/USD traded in early March -- and in mid-February, and in late January.

In other words: intermediate ups and downs notwithstanding, EUR/USD has made zero net progress for 2 months.
 
We know that the chorus of bulls or bears gets loudest at major reversal points. Yet we've heard few "loud noises" on either the EUR or USD lately...does that mean that EUR/USD will keep moving nowhere fast?
 
Lack of an extreme reading in a sentiment indicator does not preclude the market from making a sharp move in either direction. First and foremost you must look at the market's Elliott wave pattern to determine the trend. Let's do that.
 
Our forex-focused Currency Specialty Service brings you intraday updates on EUR/USD (plus 11 more forex markets) 24 hours a day. We posted these two charts for subscribers at 10:31 AM on March 21 (some wave labels removed for this article): 
 
 
Both charts offer you a good opportunity to check your basic Elliott wave analysis knowledge. Question: What's the difference between impulsive and corrective waves, and what does each pattern respectively mean for the trend?
 
You probably have the answer already, but for readers new to our pages, a quick review:
 
  • Impulsive Elliott waves are non-overlapping, directional, 5-wave price moves that are labeled 12345. They point in the direction of the larger trend.
  • Corrective Elliott waves are overlapping, often directionless, 3-wave price moves that are labeled ABC. They provide a "pause" for the larger trend. 
Above, you see that both the 180-minute and the 5-minute charts show moves labeled 12345. Basic Elliott wave analysis suggests continuation of the trend in the direction of the impulses.
 
You can get the exact price targets we see for EUR/USD, plus key support and resistance price points (for risk management), inside Currency Specialty Service now.
 
 

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Tags: Elliott wave, Elliott Wave trading, euro, forex, forex trading, technical analysis, technical indicators, trade targets, trading lessons, U.S. dollar
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