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2500 Pips Predicted In EURUSD. Now What?

If you are a technical analyst you have probably heard that we, chartists, cannot predict long term movements in the market, because the big picture is shaped by the economy, the government and the big institutions. Fundamental analysts express this opinion very often. However, there are plenty of examples that disprove those claims. EURUSD provided another one during the last several months.
EURUSD should reach the 1.40 mark. However, prices of 1.10 remain as a long-term target for the Euro against the US dollar.” You can find this excerpt in “EURUSD May Fall Even Sooner”, published on April 16th, when the rate was at 1.3835. You will find the following chart there as well. It presents the extremely bearish expectations we had about EURUSD.
eurusd-big-pic
We would like to remind you about the very good prospects the majority of economists said there were in front of EURUSD. The prestigious “Financial Times” even came out with an article, called “How The Euro Was Saved”. Well, as it turned out, “How The Euro Was (not) Saved” would have been much more appropriate.
eurusd weekly 19.1.15
Today, after a crash from 1.40 to below 1.15, the majority’s opinions are just as much bearish as they were bullish in May 2014. Once again, there are talks about how devastated the euro will be, if Greece leaves the euro zone. And once again, the Elliott Wave Principle tells a different story.
On October 8th we gave you a big picture outlook on EURUSD by publishing “EURUSD Like You Have Never Seen It”. In that material we pointed out, that there is a Fibonacci support level between 1.15 and 1.10, which we expect to become a reversal zone for the euro against the US dollar. Here is how the chart looked like more than three months ago.
eur usd monthly 8.10.14
As you can see, EURUSD was trading above 1.2640 then, while we were expecting at least 11 more cents of decline. We got 12 so far. Last week the European currency dropped as low as 1.1458, thus entering the potential reversal area. Below you will see EURUSD as it is today.
eurusd 19.1.15
So, the Wave Principle, surprisingly or not, happened to predict a decline of more than 25 figures in an eight-month period. This is definitely a big move in a relatively long term. Now we will try to forecast an even bigger one. The W-X-Y decline is a corrective pattern. Corrections are supposed to be fully retraced, when the larger trend resumes. This means, that if this is the correct count, EURUSD may soon head for a larger recovery. It might seem impossible now, but if this analysis is correct, EURUSD could reach the 2008 heights and above in the next years.



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