close icon

Elliott Wave Pattern Sent EURUSD Higher, Not Trump or Cohen

What a week for EURUSD bulls! The pair is moving sharply up after weeks or even months of suffering. After opening at 1.1437 on Monday, the European currency climbed to almost 1.1623 against the U.S. dollar, before retreating to its current whereabouts near 1.1560.

It is interesting to note that Donald Trump’s trade war, which used to serve as an explanation for EURUSD’s six-month selloff from 1.2556, is now being mentioned as the reason for the pair’s recovery. In fact, EURUSD jumped the most right after Mr. Trump said the U.S. is going to impose a 25% tariff on every car from the European Union. Apparently, the FED is worried about the effects of tariffs on the American economy, which, in turn, puts the dollar under pressure. The trade war, it turns out, can explain both a rally and a decline in the value of the dollar when needed.

Another negative for the greenback that circulates in the media is Michael Cohen’s guilty plead in a New York court, which implicates the President in illegal payments during his presidential campaign.

The problem is that both Trump’s fresh tariff threats and Cohen’s guilty plead happened yesterday, while the EURUSD chart below was sent to our subscribers eight days ago, on August 15th.
EURUSD bullish Elliott Wave reversal forecast
Since nobody can predict news and events, most Elliott Wave analysts do not even try. We certainly don’t and the latest news was just as startling to us as it was to anybody else.

Recognizing a pattern on a chart, on the other hand, is possible and that is what Elliott Wave analysis is all about. The pattern in question was a contracting triangle correction in the position of wave 4, labeled a-b-c-d-e. According to the theory, triangles precede the last wave of the larger sequence. In EURUSD’s case, the last wave was wave 5, which we thought was almost over on August 15th, meaning a bullish reversal was just around the corner.
EURUSD updated Elliott wave chart
EURUSD fell to 1.1300, where the bulls decided they have suffered enough. A week later, they were back above 1.1600. This situation proves that traders do not have to be ahead of politics, in order to stay ahead of the markets. The latter is possible without the former. Especially in the totally unpredictable twists and turns of the Trump era, relying on the news to guide our trading decisions is a game we don’t want to play. The Elliott Wave principle is a far superior alternative.

What will EURUSD bring next week? That is the subject of discussion in our next premium analysis due out on Sunday!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

GBPNZD: Pressure Mounts with Reversal in Place

GBPNZD has been in recovery mode for the past two years. The pair took off from 1.6705 in November 2016 and climbed to as high as 2.0470 in October 2018. The pound’s rally may seem counter-intuitive on the back of Brexit concerns in the United Kingdom, but that won’t be the first time the market…

Read More »

EURUSD Sharp U-Turn Predicted by Elliott Wave

2018 has so far been a terrible year for EURUSD bears and the month of October made no exception. The pair climbed to 1.1815 in late-September, but could not maintain the positive momentum. By October 31st it was down to 1.1302, losing over 300 pips that month alone. But in the Forex market traders cannot…

Read More »

Solving USDJPY Riddles with Elliott Wave Hints

Unlike the stock market, where a profitable company with a growing market share will eventually grow in value in the long-term, the Forex market can be a real riddle. Macroeconomic, political and country-specific factors are fighting for influence over currency rates in the $5-trillion-a-day market. USDJPY is one of the most closely followed pairs as…

Read More »

GBPJPY: Bearish Reversal Expected Near 151.00

GBPJPY has been in recovery mode since it touched 139.90 on August 15th. On September 21st, the pair climbed to a multi-month high of 149.72, but fell to an intraday low of 146.51 yesterday. As of this writing, the Pound is hovering around 147.90 against the Japanese yen. The time is appropriate to apply the…

Read More »

USDCAD Unreliable Resistance Identified in Advance

After slightly exceeding 1.3000 on October 8th, USDCAD retreated to 1.2926 two days later. Given that the pair has been declining since the 1.3386 top registered in late-June, assuming the bears are returning was quite justified. In addition, there was a declining trend line, which had previously led to significant selloffs on two separate occasions.…

Read More »

USDJPY Gave Us a Road Map Three Months Ago

There is a reason why it is called “trading” and not “bottom/top picking”. The latter is literally impossible even with the best trading tools and techniques. Even the Elliott Wave Principle, which we consider to be the best method for price behavior analysis, cannot tell us the exact price level at which the market is…

Read More »

GBPCAD ‘s Rally Needs a Healthy Pullback

October is shaping up to be a good month for GBPCAD bulls. The pair dipped below 1.6600 on October 2nd, but quickly reversed to the upside for a recovery of over 470 pips so far. Earlier today the Pound climbed to as high as 1.7070 against the Canadian dollar. However, extrapolating the current trend into…

Read More »

More analyses