EUR/USD Pattern That Was Near Perfect

06/21/2012 9:20 am EST

Focus: FOREX

There have been some crystal clear Elliott wave patterns appearing on EUR/USD charts recently, not the least of which was this one the Staff at ElliottWave.com called out leading into last Sunday’s Greek elections.

Last Friday (June 15), going into the weekend, the euro looked strong, as one source had put it, on hopes "that whatever the outcome of the Greek election being held over the weekend, the international community would actively work to support the Eurozone."

Then, on Sunday, once it became known that Greece was not dropping out of the Eurozone just yet, the euro got even stronger. EUR/USD shot up about 100 pips, from 1.2640 to 1.2740.

But then the rally stalled, and come Monday (June 18), EUR/USD gave back all of the gains and then some, dropping some 200 pips to as low as 1.2560. So much for the euro optimism!

Here’s how Elliott wave analysis could have helped you catch that reversal. At 5:53 pm ET on Sunday, June 17, one of our analysts posted this forecast:

chart
Click to Enlarge

“EUR/USD Peaking: The rise above 1.2670 is part of wave ’C’ of ’y’ and should run into trouble near the 1.2742 level, where waves ’A’ and ’C’ would be equidistant.”

Guess where the EUR/USD rally peaked on Sunday? At $1.2745, at the near-perfect Elliott wave target! As we mentioned before, at highly emotional moments in the markets, Elliott wave patterns get particularly clear, and this is a great example of that.

We’re not tooting our own horn about this forecast. Anyone who is experienced at counting Elliott waves could have seen this as well. The beauty of Elliott wave is that it works in this fashion on any chart and in any market. Lately, it has worked particularly well in the EUR/USD currency pair.

Waiting around for the news to "explain" why the forex market did what it did means to always be one step behind the action. Elliott wave analysis helps you stay ahead.

Start counting waves today and you’ll get better and better at seeing them form. We’re a bit biased, but it’s the best way we know to get an edge in trading.

See also: 5 Keys to Using Elliott Wave in Forex

By the Staff at ElliottWave.com

Get a free video crash course on using Elliott Wave here.

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