NEW YORK -- The euro moved toward a two-month high as news reports challenged hopes that the European Central Bank may be the clinch to an agreement on a second bailout for Greece. (Feb. 8, Wall Street Journal)
Once you read this (rather confusing) quote, one thing becomes clear: The latest round of news from Europe was interpreted by forex players as bullish for the euro, bearish for the U.S. dollar.
Great. Now that you know why EURUSD moved higher on February 8, where will it go on February 9? How about on the 10th?
The latest European "fundamentals" can’t really help you with answering that. You might have to wait until after EURUSD makes its next move for the mainstream analysts to explain why this forex market did what it did.
With a technical analysis method like Elliott wave, you don't necessarily have to wait for a potential opportunity to pass you by. For example, regarding the latest EURUSD rally, Elliott Wave International's forex-focused Currency Specialty Service posted this February 8 subscriber update:
Update For: Thursday, February 9
Posted On: Wed, 08 Feb 2012 18:39:58 GMT
EURUSD
Last Price: 1.3269
[…] EURUSD broke above 1.3235 as expected. Thrusts from triangles are terminal, and this one is no different. […]
Here's what this Elliott wave analysis means. The Elliott wave pattern that you see in the chart above -- a sideways, overlapping pattern labeled ABCDE -- is called a triangle. Triangles usually occur in the wave 4 position of the basic 5-wave Elliott wave sequence. After a triangle is complete, price usually shoots out in the direction of the previous trend -- up, in this case.
In fact, take a look at this bullish chart Currency Specialty Service posted on Febraury 7, before the post-triangle "thrust" took EURUSD higher. As you can see, the February 8 EURUSD rally was in the cards long before any relevant news from Europe.
But here's the key point to keep in mind: When a tringle is a wave 4, as in this case, the post-triangle "thrust" is a wave 5.
What does this mean for EURUSD from here -- for tomorrow and the next few days? Well, you have enough information already to make some basic conclusions.
And if you want detailed forecasts, with intraday and daily price targets, our Currency Specialty Service has them for you online right now.
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Markets Covered
Currency Specialty Service aims to keep you ahead of the action in these markets:
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| Dollar Rates |
- EURUSD
- GBPUSD
- AUDUSD
- DX, U.S. Dollar Index
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