May 312009
 
Medium Term Elliott Wave Analysis of EUR/USD

Medium Term Elliott Wave Analysis of EUR/USD

One of the golden rules to follow is never make a forecast! That doesn’t mean one shouldn’t have a plan of action ready. What the pundits say is the market has a mind of its own, and you are very likely to be wrong if you attempt to say how far a move will go. I must confess, however, that I have been wrong quite a few times, but I have been on the dot an equal number of times, probably more often right than wrong. Thus, one must assume that an Elliott Wave analyst has an edge, and that edge needs to be exploited. Another point is I have been more often right when calling the short-term turning points, but have been equally right about the medium-term directional calls, though not so precise about the exact turning points in the medium term. That is understandable because in the big picture we are dealing with a lot more uncertainty. Having sufficiently fudged the issue, it is time now to take a look at the big picture of the Euro.

Medium Term Outlook for the EUR/USD

Our medium term outlook for the Euro starts with the wave count going back to the low of 0.8225 seen in the year 2000. I suggest that you print out the accompanying chart so you can follow the wave counts comfortably. The first wave finished around 0.96.The second wave saw a move down to around 0.8350. The inability to break to fresh lows must have prompted investors to move back into Euros because that low marked the start of a huge third wave that took the Euro almost to 1.30. We then got an irregular fourth wave correction to around 1.17. After that, the euro completed its fifth wave at 1.6038 in July 2008. As you all know, when a five wave move is finished, we should get a correction (typically in three waves) taking the price back to the previous fourth wave of a lower degree. This fourth wave was 1.17 level. We saw the first corrective “A” wave down to around 1.23. The rebound from there was fast, but that was only the first leg of another 3-wave correction of the “A” wave itself. We are currently in the “c” wave of the mini correction, and being what is known as a ‘flat’ correction, we should expect this “c” wave of the “B” wave to finish near the top of the “A” wave, around 1.47. Once this mini correction is over, you should get prepared for a huge down move in the Euro all the way down to 1.17. This, then, is my medium term Elliott wave ‘forecast’ for the EUR/USD or Euro. So help me, God!

  14 Responses to “Medium-term forecast on EUR/USD”

  1. Respected SIr, I came across yr wonderful site and came to know the depth of yr knowledge abt ELLIOT WAVE THEORY>.Though i m a novice frm yr confifent approach and the accuracy with which u give reasons proves yr superiority in this field Sir I want to learn this theory I m in MUMBAI DO U HV ANY COACHING CLASSES HERE? IF NOT THEN CAN U PL SUGGEST ME AS 2 HOW I CAN LEARN THIS in mumbai. dO U GIVE ANY CORRESPONDENCE COURSE.?PL. TAKE ME AS YR STUDENT AND TEACH ME I WL B HIGHLY OBLIGED.
    THANKS IN ADVANCE
    MR.PREM

    • Hello Prem. I am happy to see your enthusiasm for learning Elliott Wave Principle. There are some very good resources on the web, but you should start by reading some good books, especially Prechter. Sorry, I am currently not in a position to teach, being a full-time treasury manager. Good luck.

  2. hhhih Dott Ram,
    us usual:
    “the one million dollars question”.
    Do you think the way down to 1.17 for eurusd began???
    cheers.
    ____Luca
    .

  3. Hi Luca, I don’t think the M/T down move in EUR/USD has begun as yet. We have to be patient!

  4. Perfect count, I totally agree 100% and think we are currently in:

    5th wave to 1.4700
    of c-wave from 1.2455 (03/04/09)
    of B-wave from 1.2328 (10/28/08)

    …which will bring EURUSD down to 1.25 minimum and probably lower in 2010.

  5. Hi Ramki,
    have nice holly.
    Cheers.

  6. Dear Ramki,

    Do you think that EUR/USD has already topped out at 1,4446 after last Friday`s reversal and the breakthrough of
    significant supports?

    Regards
    Markus

    • Hello Markus,
      I think the Euro probably needs to do some additional work before we can be comfortable trading from the short side for the medium term. There is some support at 1.4110 levels that will prop the currency in the event it breaks below 1.4133. I would be happier to sell recoveries to 1.4270 now than selling here at 1.4180! As for the question whether we have posted a big top up there, I am not able to confidently say yes, although the price action does suggest this could be right.

  7. Hi Ramki,

    Thank you for your assessment on the Euro. I agree that the recent strong downmove has destroyed my short-term bullish view with a target seen at around 1,4620. (61,8% retracement of 1,6038-1,2324). But as long as 1,4110 +1,4005 supports hold, there might be still a little chance……….
    I would be happy if you could publish an analysis on EUR/USD soon again.

    Cheers

  8. Hello Dott Ramki,
    people are waiting for your analysis on Eur/Usd.
    Us usual, tks vm ideed.
    Cheers .

  9. ramki, it is seems so strange that the US economy is out of recession as spoken by bernanke, is US still in a long term bear market according to elliott wave, is US facing deflation problems, its strange, unemployment is high, the baltic dry index is falling, deficit is high, demand is the slowing down, no lending is happening, how can it be out of recession, pls enlighten me on your thoughts. thank you.

  10. Luca, my dear friend. Euro still looks bid to me, and I would like to wait for some additional clues before I recommend a SELL for the Medium Term. Today (4 Oct 09) it is trading at 1.4570. The official line seems to want a lower Euro. But the markets are not ready yet. Let us be patient. When the time is right to sell, I will post a special update on Euro, just like I did on Sterling.

  11. Good evening mr. Ramki,
    i am an italian guy of 30 years old. i have a question for you, since you seems very well educated and smart. when the USD was at 1,34 against the euro, i changed euro for an investment in the states. now that my investment is done, i’d like to sell the USD for the euro again, but if i do it now i lose a lot of money. so, do you think the USD will be stronger any soon? what’s your forecast for the 2010?
    thank you so much for your help.
    best regards
    Stefano

  12. Amazing!
    Congratulations on your incredible prediction!
    I would very much appreciate now that it seems days away from coming completely correct, what do you think will happen in the upcoming months!

    Once again! Great job!

    Best Regards,
    DC

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