{"id":68294,"date":"2015-02-18T20:10:55","date_gmt":"2015-02-19T01:10:55","guid":{"rendered":"http:\/\/countingpips.com\/?p=68294"},"modified":"2015-02-18T20:10:55","modified_gmt":"2015-02-19T01:10:55","slug":"euro-bulls-may-soon-have-their-day-in-the-sun","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/02\/euro-bulls-may-soon-have-their-day-in-the-sun\/","title":{"rendered":"Euro Bulls May Soon Have Their Day in the Sun"},"content":{"rendered":"
February 18, 2015<\/div>
\r\n<\/div><\/div>

Our “Pro Service Outlook 2015” FREE video event introduces you to the near- and long-term forecast for the world’s most popular FOREX markets — and so much more <\/span><\/h3>\n

By Elliott Wave International<\/span><\/h3>\n

As the euro clings to the guardrail of a 7- (no, wait) 9- (Doh! there it goes again) now 11-year low, debate over the future of the eurozone’s currency rages on. And in the mix, the ultimate four-letter FOREX word just reared its ugly head: PARITY<\/b>.<\/p>\n

“The euro is likely to reach a 1-1 ratio with the dollar for the first time since 2002.” (Feb. 2, Wall Street Journal)<\/p><\/blockquote>\n

Amidst the flurry, we’d like to focus your attention on another word — CLARITY — and invite you to take an objective step back and evaluate why the euro is where it is today.<\/p>\n

First, you have to go back to the beginning of the euro’s dramatic sell-off, to the early part of last year. At the time, the euro was orbiting a 2.5 year high against the U.S. dollar having soared 15% from its 2012 bottom. The strongest thing we remember about this time, though, was how certain mainstream analysts were in the euro’s ongoing upside potential.<\/p>\n

There were, after all, plenty of “fundamental” reasons to embolden the bullish claim, such as: strong eurozone economic data, growing demand for the euro’s perceived safety, and most of all, an accommodative monetary policy by the European Central Bank.<\/p>\n

In March 2014<\/b>, ECB President Mario Draghi gave the ultimate green light to euro bulls: Draghi called the eurozone economy an “island of stability,” and foresaw no need for radical, currency-debasing rescue efforts such as rate cuts or quantitative easing. Here, these news items from the time set the scene:<\/p>\n

“ECB unlocks the door for further euro strength… and helped the euro realize its pent-up bullish potential.” (March 8, 2014 Yahoo! Finance)<\/p>\n

“Euro Strength Here to Stay, Unless ECB Steps In” (April 16, 2014 Reuters)<\/p>\n

“The euro needs to cross the 1.42 handle before the ECB takes any action to weaken the currency.” (May 5, 2014 CNBC)<\/p><\/blockquote>\n

Yet despite the seemingly perfect euro rally set-up, the bottomed dropped out on May 8, 2014. The euro’s dramatic reversal kicked in, even as the ECB held true to its no-action policy until finally pulling the QE trigger on January 22, 2015.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

In the end, the euro’s fundamental backdrop did NOT <\/i>lend itself to a major turn.<\/p>\n

But in fact, the Elliott wave pattern forefront on the euro’s price chart — did. One day after the euro’s 2014 peak, our May 9, 2014 <\/b>Currency Pro Service <\/i>posted a special video forecast for the most popular currency pair on the planet: the EURUSD. In that video, Currency Pro Service <\/i>editor Jim Martens identified a multi-year ending diagonal on the euro’s daily price chart. And, as its name suggests, this particular Elliott wave pattern signaled an “end” to the rising trend. Please go ahead and watch this clip from Jim’s video to hear him explain the diagonal’s bearish implications in person:<\/p>\n