Market insight: U.S. Dollar at 11-Year High Against Euro

By Elliott Wave International

On March 4, we spoke with Jim Martens, our Chief Currency Strategist. His Currency Pro Service is participating in our Pro Services Open House, a free week-long event that starts next Tuesday at elliottwave.com.

Elliott Wave International: Jim, it's a good time to talk about currencies, because the euro has just touched an 11-year low against the dollar. Did you ever think you'd live to see this day?

Jim Martens: Did I ever think I'd live to see this moment... Well, back in mid-2011, when EURUSD was trading near $1.50, we started talking about the upcoming retest of $1.1876, the 2010 low. We were convinced that the rally from that level was a correction -- so EURUSD would ultimately fall back to it. It took a while to get there because what followed was a wide-ranging sideways consolidation in EURUSD -- a triangle, in Elliott wave terms, an overlapping pattern labeled ABCDE that you see on this chart:

That triangle ended in May 2014 with EURUSD almost hitting $1.40. From that point we had been expecting a move below $1.1876 -- and we had lower targets, as well. Most of them have been hit, and the interesting thing is that now, all of a sudden, the idea of the dollar/euro parity is becoming popular. Someone at Goldman recently talked about parity by the end of 2017.

Elliott Wave International: Do you think we'll see parity? Continue reading "Market insight: U.S. Dollar at 11-Year High Against Euro"

Forex Traders: The Only Question You Should Be Asking

By Elliott Wave International

I can't help it. Whenever I read the mainstream financial news, I feel like I'm eavesdropping on a job interview at Microsoft.

In case you don't remember -- Microsoft was made famous, in part, for asking prospective employees one single question: Why is a manhole cover round?

They wanted to assess how a person approaches a question that has many answers. And, many answers are what they got, from the most practical (i.e. "Because a manhole is round") to the most philosophical (i.e. "The circle is the most aesthetically pleasing shape for the human eye.")

I'll now take you back to the world of mainstream finance where those in charge are regularly asked to answer this basic question: Why did market "X" move this way today? And, many answers are what they give.

Take, for a real-world example the March 9-10 upsurge to a 7-and-1/2 year high in the Dollar/Yen currency exchange pair. As for why the USDJPY rallied, the experts offered up these (and many more) explanations: Continue reading "Forex Traders: The Only Question You Should Be Asking"