Wednesday, May 30, 2012
Stocks Falling in 3rd Wave; Euro Heads Towards 1.1875
On a side note, don't miss out, only one more day to get Elliott Wave International's free Financial Forecast newsletter. Offer expires Thursday, May 31st. Take advantage of free tools everyone: Download EWI's new 10-page May 2012 Elliott Wave Financial Forecast here .
The euro has solidly broken through 1.2600 support. As I said in last post, there is nothing really holding up the EUR/USD until 1.1876. Since last post, the EUR/USD has dropped almost 200 more pips. Although price action looks extremely bearish, and a waterfall of a decline may occur, be prepared for pops along the way - at least psychologically. I don't see any reason to abandon the aggressively bearish view at this point. Longer term, the EUR/USD should make it to the 1.1876, and it's quite possible it will make it there in quite a hurry as the price action suggests.
14 Elliott Wave Trading Insights You Can Use Now
Also, remember this chart above from my May 12th's post (click here for full post)? It shows the weekly EUR/USD and the big declines that occurred after big chart gaps. In the past, there was a 2700 and 1100 pip loss following their gaps. The most recent gap occurred around 1.3000, and the pair is currently trading at 1.2400, which registers a 600 pip loss so far. So history is repeating itself. There still may be plenty more to go, but again, be prepared for sharp rallies and major reversal patterns. *** Momentum on the intraday charts is showing that a bullish divergence is building, and the daily RSI is oversold. I'm still aggressive in taking big short positions, but am also closely watching for any big reversal patterns that demand I protect my gains. ***
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.