The last two weeks have been exceptionally good for EURUSD so far. The pair rose from as low as 1.1045 on August 5th to 1.1322 as of yesterday, August 16th. The plunge to 1.1045 came as a result of the latest NFP report, which turned out to be very good for the dollar… at first. Then why did EURUSD rise so much? Could the recovery be predicted? If you were to rely on the news, you would be caught completely off guard by euro bulls. That is why we count on the Elliott Wave Principle, which removes the need to wait for such external factors as news and events, and allows us to extract information directly from the market. We, in turn, present this information to our premium clients in the form of weekly market updates. The following chart was sent to them on Monday, August 8th, before the markets opened.
By applying Elliott Wave analysis on the 4-hour chart of EURUSD, we came to the conclusion that despite the sharp decline after the NFP report, the pair is likely to continue higher, as long as the invalidation level at 1.0951 was safe. “This is not the time to join the bears” was the opinion we shared with our premium clients. Eight trading days later, let’s see how the situation has been developing.
The bulls took the wheel almost immediately, not allowing the bears to even think about threatening 1.0951. The Elliott Wave principle once again helped us predict what was coming in EURUSD and take advantage of it. This is an example of one of the many cases, in which the wave analysis correctly forecast future price moves. However, it admits the outcome is never 100% guaranteed. That is why it provides specific price levels to guide and tell traders if they are wrong. By trading the news, on the other hand, you could stay wrong forever.
What to expect from now on? What is the bigger picture saying? Is EURUSD going to continue even higher or the resistance near 1.1320 would turn out to be too strong for the bulls to breach? Prepare yourself for whatever is coming. Order your Elliott Wave analysis due out every Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.