Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
How To Play The 2018 Cannabis Boom - 18th Dec 17
Should You Consider Investing/ Buying Gold or Bitcoin? - 18th Dec 17
Gold EFPs: Absolute Proof that the Paper Gold Price is a Fraud - 18th Dec 17
Gold – Technical Obfuscation, Fundamentals, Predictions - 18th Dec 17
Stock Market Final Thrust is Likely - 17th Dec 17
Never Mind Tea Leaves, Here’s a Strong Signal from the Economic Dashboard - 17th Dec 17
As Bitcoin Breaks All-Time Highs Near $18,000 Its Future Has Never Been So Uncertain - 17th Dec 17
Best Time / Month to Buy a Used Car From a UK Dealer - 16th Dec 17
Relief Rally in Gold Mining Stocks - 16th Dec 17
Amid Bad Fundamentals, Gold Sector Rally May Have Begun - 16th Dec 17
Gold Bullish on US Fed Interest Rate Hike - 16th Dec 17
The LORAX Explains What Happened to Sheffield's Street Trees 2017 - 16th Dec 17
Bitcoin Trading Alert: Bitcoin Pauses – Will Appreciation Follow? - 16th Dec 17
SanDisk Ultra 128gb 100mbs Micro SD Card for Smartphone's Speed Test - 15th Dec 17
Inflation is Spiking Globally… Bond Bubble Bursts in 3… 2… - 15th Dec 17
Sheffield's 'Real' LORAX Defending the Trees From the Labour City Council Patrol Units - 15th Dec 17
Stock Market Decline Signals are Near - 15th Dec 17
Santa Is Putting Christmas On The Blockchain And Saving Billions - 14th Dec 17
The Unprotected, the Protected, the Vulnerably Protected Classes—Which Are You? - 14th Dec 17
Gold’s Upside Target - 14th Dec 17
Year-end US Interest Rate Hike Again Proves To Be Launchpad For Gold Price - 14th Dec 17
2 Charts That Might Define the Fed’s Jerome Powell Era - 13th Dec 17
UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - 13th Dec 17
Stock Market Elliott Wave Forecasts - Is the World coming to the end? - 13th Dec 17
A Method Traders Can Use to Confirm an Elliott Wave Count - 13th Dec 17
Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - 13th Dec 17
A Former Wall Street Veteran: Good Traders Are Born, Not Trained - 12th Dec 17
Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts to Continue? - 12th Dec 17
Masters of Economic and Political Illusion – in Taxes, Debt, Government, and Markets - 12th Dec 17
Approved Used Land Rover Main Dealer Real Customer Buying Guide - Hunters, Chester - 12th Dec 17
Gold Price 100% Bullish Signal - 12th Dec 17
Epic Stock Market & Fixed Income Bubble Will Not End Well - 12th Dec 17
Bitcoin can be stolen. Although Can’t be hacked - 11th Dec 17
Have Stocks Reached A Permanently Rigged Plateau? - 11th Dec 17
Trying To Beat The System Is A Fatally Flawed Investment Strategy - 11th Dec 17
Is This The Beginning Of The Next Silver Rush? - 11th Dec 17
The Dow Gold Ratio - 11th Dec 17

Market Oracle FREE Newsletter

Traders Workshop

Sell those Euros. Sell'em

Currencies / Euro Jan 07, 2017 - 12:07 PM GMT

By: EWI

Currencies

How do you know a real FX opportunity from a fake one?

Late last Thursday night (Dec. 29), I got an insistent email from a colleague.

Jim Martens, long-time editor of our forex-focused Currency Pro Service sent me this message with only a subject line:

-------- Original message --------
From: Jim Martens
Date: 12/29/16 9:16 PM (GMT-05:00)
To: Vadim Pokhlebkin
Subject: Sell those euros. Sell'em


It was around 9:30 PM when I read Jim's email, glanced at a EURUSD chart and saw that it had spiked about 300 pips higher in after-hours trading:

At the time, news stories included some head-scratching. As our next-day Short Term Update put it,

"The [Euro] surged to 1.0654 in overnight trading. Several financial stories were at a loss for the sharp rise. "No 'particular' news seems to be driving the euro's jump," says the head of forex sales at an Asian bank. Bloomberg called the jump a "Mystery Move."

Even if the reasons behind it weren't clear, without a doubt many forex traders saw the 300-pip jump as the start of a bigger rally. But to our Currency Pro Service team it was clear it wasn't the start of anything.

Here's the same chart with Elliott wave labels shown:

"Sell those euros," as the subject line said. You can see why: We saw the rally as the last gasp of a wave 2 correction.

In fact, for days leading towards that spike EURUSD's wave patterns called for the decline to resume:

When last Thursday's "mystery" rally came up to within pips of a .618 Fibonacci resistance area, it warned us that the bottom was ready to fall out.

Which it did. On Tuesday (Jan. 3), the U.S. dollar index hit a fresh 14-year high against the euro and other competitor currencies. This Currency Pro Service chart shows you the extent of EURUSD's decline:

In a Tuesday morning intraday update, Jim Martens wrote:

EURUSD
[Posted On:] January 03, 2017 09:38 AM

(Last Price 1.0393): Good morning and welcome to our intraday coverage of the first New York session of 2017. We ended 2016 suggesting the euro might experience a rough start to the new year. It's down 1.10% since Friday.

Also on Tuesday, a Reuters headline said: "Dollar hits 14-year highs after strong U.S. manufacturing data." If only the news could really explain everything.


Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success

Learn how to put the power of the Wave Principle to work in your forex trading with this free, 14-page eBook. EWI Senior Currency Strategist Jim Martens shares actionable trading lessons and tips to help you find the best opportunities in the FX markets you trade.

Download your free eBook now

This article was syndicated by Elliott Wave International and was originally published under the headline "Sell those euros. Sell'em.". EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife