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EUR/USD: How to Trade a Market That Defies "Fundamentals"?
All too often, EUR/USD seems to move despite the news, not because of it
By Vadim Pokhlebkin
Mon, 16 Apr 2012 17:30:00 ET
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On Friday (April 13), U.S. jobless claims rose -- but the U.S. dollar didn't fall against the euro; it gained. On Monday (April 16), U.S. retail sales rose sharply -- but the USD didn't rally; it gave back to the EUR almost all of Friday's gains.

Go figure.
 
Of course, you can't assign EUR/USD moves only to the U.S. economic reports; the eurozone has plenty of news of its own. On Friday, for example, a "non-supportive" ECB statement was blamed for the euro's losses. But then, no one took back that ECB statement on Monday, yet the euro gained... How do you trade a market that defies the laws of "fundamental" logic?
 
That's a trick question. The answer is -- it's hard to trade on "fundamentals," period. Have you seen how often EUR/USD seems to move despite the news, not because of it?
 
On the morning of April 13, while the mainstream forex world was debating the meaning of the latest economic reports, the editor of EWI's forex trader-focused Currency Specialty Service, Jim Martens, recorded an 8-minute subscriber video update. The message was simple: a potential opportunity in GBP/USD and EUR/USD directly ahead.
 
Here's one of the charts editor Jim Martens showed on April 13, expecting EUR/USD to fall:
 
 
That April 13 bearish EUR/USD forecast was based strictly on the Elliott wave patterns you see labeled in the chart above. No "fundamentals" were involved. Here's the same EUR/USD chart showing what happened then (some Elliott wave labels erased for this article): 
 
 
You may ask -- OK, EUR/USD indeed fell on April 13, but rose sharply on Monday, so how does this rally fit into the decline?
 
You'll find answers online now inside Currency Specialty Service, once you've subscribed.

 
 
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.
 

 

 

 

 

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