close icon

EURUSD Three Weeks Ahead of The News

Yesterday the EURUSD forex pair made another new low and the bears are probably getting more and more confident. But even the strongest of trends are interrupted by corrections. Should traders be preparing for one such correction now?
More than three weeks ago, on October 7th, we published “EURUSD rate aiming at 1.28”. The forecast stated, that EURUSD is probably forming its wave IV correction, which should take the rate to at least 1.28, before the trend resumes in wave V to the downside. The chart below shows the EURUSD exchange rate as it was in the beginning of last month.
eurusd dissection
Nine days later, on October 16th, we gave you an intraday update of the situation, because we thought wave IV was already over and it was time for wave V to begin. In “EURUSD to fall below 1.25?” we used the following chart:
eurusd 16.10.14
As visible, wave IV did manage to climb above 1.28 in corrective fashion, which brought us to the conclusion that we should prepare for the next decline. It was supposed to lead prices to a new bottom, lower than 1.25. Those of you, who have been following this pair, probably know how this forecast developed. Anyway, the next chart illustrates it.
eurusd 1.11.14
On October 16th the euro was trading in the zone of 1.2780 against the US dollar. Yesterday, October 31st, it fell to as low as 1.2484, thus making the new bottom we have been waiting for. This is a 300-pip drop-off in just two weeks time. Now let’s see how the whole decline from 1.40 looks like with the new developments.
eurusd 1.11.14 4h chart
The 4-hour chart above suggests that we have the minimum requirements to label this sell-off as a five-wave impulse. According to the Elliott Wave Principle, every impulse is followed by a three-wave correction in the opposite direction. Does this mean we should expect an immediate recovery? No, because wave V does not seem to be over yet. In order to be completed, it has to be a regular impulse or an ending diagonal. So far, it is none of the above. That is why we anticipate more new lows ahead before the corrective rally begins.

EURUSD provided us with a good example of how the  Elliott Wave Principle can help us prepare not only for one, but for two consecutive moves. We want to highlight the fact, that there have been plenty of news and events concerning EURUSD since October 7th, but we did not need to wait for any of them. We were prepared for what should happen long before its “cause” was known to the public. All thanks to Ralph Nelson Elliott and his findings.

Stay informed with our newsletter

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

Privacy policy
You may also like:

USDCAD Rises in Predictable Elliott Wave Manner

USDCAD rose significantly this past week, climbing from 1.2512 at the open to as high as 1.2949 Friday. The surge can be attributed to the slide in crude oil prices. Oil and USDCAD are known to have an inverse correlation due to the heavy reliance of the Canada’s economy on the commodity. And while the…

Read More »

Two Months Ahead of the 400-Pip Slide in EURUSD

Economic and fiscal steps taken to help the global economy rebound from the COVID-19 crisis are still in effect in both U.S. and EU. The amount of stimulus by the Fed far eclipsed the measures taken by the ECB. Direct unemployment payments are even creating a labor shortage. Many people prefer to rely on government…

Read More »

Elliott Wave Support Can Send USDZAR 15% Higher

It’s been a bad year for USDZAR bulls. The pair has been declining ever since it reached a high of 19.34 in early-April 2020. As of this writing, it is barely holding above 14.30, down 26% in a little over twelve months. Does this mean now is a good time to join the bears? We…

Read More »

Ahead of EURUSD ‘s Disappointing Start to 2021

Overall, 2020 was a good year for EURUSD bulls. Despite the March crash during the coronavirus-related volatility, the pair ended the year up almost 9%. With more stimulus already in the pipeline at the start of 2021, it made sense to expect further devaluation of the dollar against the Euro. Alas, common sense doesn’t always…

Read More »

USDJPY Gains 450 Pips and Counting in Two Months

2020 wasn’t a good year for USDJPY bulls. Starting from 108.63 in January, the pair closed at 103.32 on December 31st, down 4.9% in twelve months. But what the dollar lost against the yen in the entire 2020 it is now close to recouping in less than three months. USDJPY is approaching 108.50 as of…

Read More »

USDTRY Drop Accelerates as Elliott Wave Predicted

The Turkish Lira hit its highest level against the U.S. dollar in six months. The country economic and legal reforms announced last year coupled with tighter monetary policy appear to be giving the desired effect. USDTRY is down 19.3% from its November 2020 high after being in an uptrend since mid-2008. Most analyst, however, are…

Read More »

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

More analyses