German DAX pointing to a weaker EURUSD – Elliott Wave



The German DAX index is in down-trend during this week, the same as EUR/USD from the Feb 13 high. Also, both markets reached new lows this morning at the same time, so we can say that correlation between these two is very tight. This tells us that for the near-term predictions on EURUSD we should focus on the DAX more often and not so much on the US stock market which is still in an uptrend. OK, now let’s go and see the DAX intraday structure.

DAX Elliott Wave Analysis February 15 2013

We can count five waves down from 7734, with a triangle in wave iv). That’s very important. Why? Because triangles occur prior to the final move of the larger pattern, so our wave v) should then be last leg in wave (i).

The interesting part is that we know that after every five waves correction follows, and this is what we expect on DAX; 3-wave retracement in wave (ii) ideally back to 7650/70.

EUR USD Elliott Wave Analysis February 15 2013

So, if correlation between the DAX and EURUSD will remain tight, then a bounce on EURUSD would also not be a surprise. A three wave retracement in wave B back to 1.3400 should be interesting for a short position…if we get a pull-back.

Traders, I hope this analysis makes sense. Have a good weekend.
Grega

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About

Gregor Horvat is  based in Slovenia (Central Europe) and has been in Forex market since 2003. He is technical analyst and individual trader who also provide a lot of articles and trade plans based on the Fibonacci and Elliot Wave principle. He was working for Capital Forex Group and TheLFB.com. His feature articles have been published in: Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu. He mostly focuses on currencies, oil, gold, and the U.S. stock market. Gregor Horvat is also founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). EWP provides a method for identifying price points at which a market is most likely to turn. Knowing the probable swing and reversal points provides confirmation of where investors could enter and exit positions for the highest probability of success. Gregor Horvat Chief  Technical Strategist Website:  For more analysis visit our website and Try our services absolutely free for 7-days! http://www.ew-forecast.com/service//

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