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EUR/USD: Draghi Throws in the Towel! Good-Bye, Euro?!
Did you hear this? What does it mean for the euro-dollar?
By Vadim Pokhlebkin
Thu, 31 May 2012 16:45:00 ET
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This May 31 news report only got a few headlines. Frankly I'm surprised it didn't get wider coverage, but judge for yourself (bold added):
 
May 31, Telegraph.co.uk -- Eurozone is 'unsustainable' warns Mario Draghi.
 
[The head of the European Central Bank] said the bank could not "fill the vacuum" left by member states' lack of action...
 
Amid escalating talk of a potential bail-out for Spain, the president of the ECB said the central bank was powerless to stop the debt tornado. "It's not our duty, it's not in our mandate" to "fill the vacuum left by the lack of action by national governments on the fiscal front," he said.
 
Whoa. The head of the world's second-largest central bank admits publicly that they cannot stop the crisis. Good-bye, euro?
 
Seriously, what else would forex traders conclude from this report? Against the U.S. dollar, the euro is already trading at a new low for this year, well below $1.24. In the past 5 weeks alone, EUR/USD has lost around 1,000 pips -- a euro loss of 10 full cents! Now that Draghi has thrown in the towel, how low will EUR/USD fall, to the parity?
 
Before you succumb to panic, remember that moments like these are precisely the right time to look at Elliott wave patterns to gauge the market's next move.
 
Our forex trader-focused Currency Specialty Service has stayed with EUR/USD's decline from the start; we've reported on this before, here and here.
 
And our latest Elliott wave chart analysis -- with other supporting technical indicators -- suggests that the euro bears might get a surprise in the days ahead. 

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Tags: Elliott wave, Elliott Wave trading, euro, european central bank, European debt crisis, forex, forex trading, U.S. dollar
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