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EUR/USD: Oh What a Tangled Web We Weave...
...when first we practice to make heads or tails of forex market news
By Vadim Pokhlebkin
Tue, 03 Jul 2012 15:45:00 ET
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Fact is, many forex traders stay glued to the economic news. Which central banker said what, and when; which economic report could be bullish or bearish; how the interest rate differential between countries affects the exchange rate -- and on, and on. 

Mainstream forex analysts mostly discuss the same factors. Here's today's take on the latest move in EUR/USD, for example:
 
The euro fell against the dollar on Tuesday with investors betting that the European Central Bank will cut its benchmark interest rate at its meeting on Thursday... That overshadowed any optimism remaining from an announcement last week that euro zone leaders agreed rescue funds could be used to stabilize bond markets... (Reuters, July 3)
 
A very reasonable explanation, indeed. It all sounds so perfectly logical -- and it is! The reason "fundamental" analysis is so popular is because it just makes sense. There is just one problem with this approach, namely: Where will EUR/USD go tomorrow?
 
On that, the tangled web of "fundamentals" tells you little. Maybe the euro will gain tomorrow "on the eurozone optimism" -- or maybe it will lose "on fears of the ECB rate cut." But rest assured: Once EUR/USD makes its move, we'll again hear neat explanations as to why the market did what it did. And what if you want to trade tomorrow's trend, not yesterday's?
 
Well, some forex traders simply choose to jump on any large enough move in hopes "the big guys" will keep the momentum going. That might work, but you're still "riding blind." And you don't have to.
 
Elliott wave analysis gives you a clear, unambiguous forecast in most cases. With Elliott, you focus on chart patterns. There are only 13 of them, and once you figure out which one is underway, you have a good idea of what should happen next.
 
For example, right now, while the mainstream is weighing the "fundamentals," our forex trader-focused Currency Specialty Service is keeping subscribers focused on the fact that the entire EUR/USD move since June has a corrective -- sideways and overlapping -- look to it (some Elliott wave labels erased for this article):
 
 
Corrections are not "the trend" -- they are "pauses" within it. Which means that EUR/USD will go next where the larger trend is pointing. Find out what that is today by seeing all of the Elliott wave-labeled charts inside our Currency Specialty Service.

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Tags: Elliott Wave trading, eu, euro, euro stoxx 50, euro/USD exchange rate, european central bank, European debt crisis, European Union (EU), eurozone, forex, forex trading, Interest Rates, online trading, technical indicators, trading lessons, U.S. dollar
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