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TUESDAY ADDENDUM, 1:30pm EST
The euro smashed through 1.3560 convincingly in the US session, giving the bears the advantage again. Doing so opens the door for more euro losses. I think the key for the short term is for the bears to get a strong daily close beneath 1.3560 to give even more evidence that the short term downtrend is still firmly intact. The more surprises to the downside, and barriers broken on the downside, the more likely it is that the euro has formed a major top over the long term. Even if you're not a currency trader, understanding the impact of the euro and the US dollar is still key for equities and commodities. A major top in the euro, and major bottom in the US dollar, will put tremendous pressure on stocks and commodities over time.
The british pound is getting punished against the dollar this morning, hinting that some degree of 3rd wave is unfolding. As long as this holds, it suggests that the dollar is going to continue surging higher and has most likely put in a significant bottom already. What's also of note is the the US dollar has made a new high.against the swiss franc this morning at .9970, eliminating a previous impulsive looking decline from contention. Oftentimes when these "barriers" are established in the majors it will either lead to some sharp follow through, or a sharp temporary reversal. So whether the dollar pulls back a bit from here is not that relevant at this time since it seems that it has most likely formed a long term bottom already. Any dollar pullback will just be an opportunity for dollar bulls again.
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PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.