The EURUSD currency pair climb as high as 1.1464 on Tuesday, April 12th, but the bulls quickly ran out of fuel, which led to a sharp sell-off of more than 230 pips to 1.1233 so far. Experienced traders never take the current trend for granted, but is there a way to anticipate and prepare for that type of violent reversals? The majority of analysts and market participants rely heavily on economic and political news and events. We have tried this approach as well, but it did not work for us. That is why we prefer the Elliott Wave Principle. It is a technical forecasting method, which, when properly applied to the charts of the analyzed instrument, can often help traders correctly predict important market turns. This is the method we put to practice on the 30-minute chart of EURUSD on Monday, April 11th, to prepare our premium clients for what the pair was most likely to do next. This forecast is given below.(some of the marks have been removed for this article)
As visible, the Wave principle made us think we should see a couple of new highs near 1.1470, followed by a sharp move to the downside. In fact, the very final sentence of the analysis our premium clients received on April 11th stated that “1.1470-1.1500 will be the area, where the trend is likely to change direction.” The chart below shows how things went.
Well, we missed it by less than 6 pips. EURUSD managed to climb to 1.14646 before crashing down to the lows of 1.1230. Nevertheless, we should once again thank Ralph Nelson Elliott, who in the 1930s discovered that price trends move in recognizable repetitive patterns or waves. Even now, in 2016, this knowledge is still helping us make the right decisions. Traders, who are not constantly looking for a reason behind every single move the market makes and understand the fact that it is has its own laws and rules, will eventually stop blaming the politicians, the billionaires or the big banks for their losses and are much more likely to learn how to be successful in trading.
What to expect from now on? What is the bigger picture saying? Is EURUSD going to continue even lower or the support near 1.1230 would turn out to be too strong for the bears to breach? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order the one due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.
