Why follow Euro pairs closely?
Being one of the biggest economies in the world, Euro has a significant impact on other currencies. When forex markets are in highly volatile conditions, many a times the dominant factor is one of the following 4 currencies – US dollar, Euro, British pound or Japanese yen. These currencies have an overflow effect. Meaning, when high-impact news events released in one of these currencies, almost all forex and commodities markets react accordingly.
But the purpose of this post is not to discuss news events or their impact on the market. Like any other indicator, news events too are lagging. In the sense, that news traders have to take action after the news release. Pre-release speculation is pure gambling. So my forecasting is purely based on wave analysis, specifically Elliott waves.
EURUSD is the most popular forex instrument of all. Hence I do weekly analysis and forecasts on EURUSD.
Price has clearly broken out of the very long corrective structure that started from highs of December 2008. So this prolonged correction has been going on for over 6 1/2 years. That’s quite the period I have known forex. Literally, all my life as a trader, EURGBP has been in a correction? Amazing stats, right?
Anyways, the market is at final phases of a supposed Grand-supercycle-wave-1. Wave-5 of both degrees below (Supercycle and Cycle) are yet to complete. But the overall wave patterns in the foreseeable future may seem sideways. The hint is to look for highly probable long opportunities for months to come. But be caustious as subtle reversals are a possibility because the wave-5 usually lacks momentum and strength.
I have been forecasting a long-term long on all JPY crosses for sometime now. However, upon close examition of internal wave structures within the prolonged wave-C, it seems there is more downside for EURJPY before it takes off for the subsequent bullish impulse. But a corrective bullish wave as the wave-4 is a possibility. Ideally wave-4 will reach closer to the structure-top of the overall wave-C.
At the moment, there is limited potential for short opportunities. Because price is closing in for the end of Primary wave-5.
EURAUD is at a very interesting situation. Basically the next Daily or 4-Hour trend could decide whether the Millenium-wave-B, would be a Triangle or a ZigZag pattern. This technically changes the direction bias for few weeks to come. However, there is a long way to go before the next weekly bullish impulse – wave-C.
EURNZD too is at the final stages of Supercycle-wave-C. Specifically at the Cycle-wave-4. Hence the bearish impulsive Cycle-wave-5 is yet to start. Similar to rest of the major EUR pairs, EURNZD too awaits a big bullish move as the Grand-supercycle-wave-C.
Since this is a weekly chart, there is a long way to go before the big, weekly, bullish trend starts.
In general terms all major EUR pairs expects a similar wave structure. Except EURGBP, rest of the Euro crosses featured in this post are at the end of a weekly correction, signalling a huge bullish trend to commence soon. On the other hand EURGBP is already in a bullish impulse. However EURGBP too expects a similar wave pattern according the forecast.
This similarity across many Euro pairs warrants a wave analysis on the EUR Index itself. Although Eur index is rarely used by traders, in terms of analytical-value it’s right up there with the Dollar index. The reason is obvious.
Here’s a look at the Euro Index – weekly chart.
How similar is the wave forecast of the Eur index compared to the rest of the Euro crosses? Share your opinion, agreement or disagreement of the wave analysis or the count, in the comments section below.
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