EUR/USD (Forex): How to Forecast Market Moves Before They Occur
Not every Elliott wave forecast works out. But the method's objectivity still trumps most discussions about "market fundamentals."

News stories move the markets -- that's what just about every investor believes. But can you predict what the market will do before the news is released? Let's look at a fresh example: the actio in the EUR/USD on November 4, when the Federal Reserve Bank announced its latest decision on the U.S. interest rates.

No Slave To Fashion
It's the lack of monetary enforcement that will likely save Europe from overspending.

European Central Bank President Jean-Claude Trichet has proven throughout this financial crisis that he is his own man when it comes to navigating the euro-land banking system through the deflation and debt deleveraging storm. And will likely save Europe from overspending.

The New Carry Trade
How long the new "carry trade" funded by low U.S. interest rates may last?

As the recession has taken hold, short-term U.S. interest rates have been pushed down to .25% or lower. This encourages those who want to borrow to do so in U.S. dollars, which is exactly how the low Japanese interest rates of the past boom cycle encouraged borrowing in yen. But markets can move fast when they head down, and when a carry trade unwinds, few things move faster.

Illusion of Control: Central Banks and Interest Rates
A quick look at the right chart can make things crystal clear.

On October 6, the Reserve Bank of Australia surprised the global financial community with a .25% interest rate hike. Only 1 in 20 surveyed economists expected it. But if conventional economists would simply plot central banks’ decisions on a chart of bond yields, they would make a "shocking" discovery that could save them a lot of surprises...

The Fed Leaves Rates Unchanged: Now What?
Or, an even better question: So what?

What an interesting day of trading we saw in stocks on Wednesday (Sept. 23.) On the same day, we had: 1. A single event -- the Fed's interest rate announcement; 2. The stock market's bullish -- and -- bearish "reaction" to it, and 3. Several news stories explaining why stocks rallied -- and -- declined after the event. One question remains: Where will stocks go from here?

Interest Rates: Think Central Banks in Control? Think Again.
What do the Fed, European Central Bank and Reserve Bank of Australia have in common? Answer: They don't control interest rates.

If you believe that central banks' "potent directors" carefully watch economic indicators and deftly adjust interest rates accordingly, this will come as a shock: Central banks are no more in control of interest rates than they are of the weather. Three examples prove this point.

June 24 FOMC Meeting: Can the Fed Defeat the Bear?

t's Federal Open Market Committee time again. And, even before the June 24 meeting adjourned, word-parsers were dissecting the "minutes" like a high school biology student with a frog. In short: While everyone with a pulse guesses at the meaning of Bernanke-speak, ALL of them hope his words give the stock market something to celebrate.

Prechter on T-Bonds, THEN and NOW
Yes, Interest Rates DO Drive the Fed

That was in 2002. Jump ahead to 2008 and early 2009 -- we've seen the gargantuan size of the U.S. government's bailout schemes, and watched the Federal Reserve's unprecedented steps to keep interest rates low. Clearly the time had come for Prechter to focus again on government debt...

5 Markets Where the Wave Principle Forecasts Best -- and Why

Gold in particular follows the Wave Principle impeccably, at least in a world of fiat paper currencies. Gold is a wonderful reflector of the Wave Principle because unlike, say, pork bellies, it is traded by people around the globe, so the prime mover is the psychology of human beings at the most shared and basic level.

How to Trade Forex around Major News Releases
As the saying goes, you miss 100% of the shots you don't take.

Any experienced forex trader will tell you that trading currencies when a major economic report gets released can be treacherous. Probably the most infamous of all scheduled news releases -- infamous for its treachery, that is -- are the U.S. interest rate announcements by the Federal Reserve Bank. But market action on those days can also mean opportunity for a forex trader who is properly positioned BEFORE the announcement. Here are some thoughts on how to do that...

Europe: Not As Lucky As U.S.
The U.S. may be bankrupt, but the Treasury still enjoys robust bidding at every bond auction.

The United States enjoys funding its ever-increasing debt in its own currency as the dollar, for better or worse, remains the world’s reserve currency. Because the euro and the pound sterling do not enjoy this status, the smaller economies under the European Union's stability pact are having trouble attracting investors for government debt. The only answer is to offer higher yields in order to attract investors... 

EUR/USD: Anticipate
What's the point of explaining market moves that have already happened?

Conventional forex analysts do a good job of explaining how news stories move the markets – in retrospect. This week, for example, as the euro-dollar exchange rate (EUR/USD) moved about 400 pips higher, a story on the morning of January 28 said this...

European Credit Crisis: Disaffirmation
Anyone on this list is fully engaged in disaffirmation.

It’s bad already. And it’s getting worse. Still, there are many who just don’t – or won’t – get it. The latter group is usually filled with politicians, too engaged in denial to fully grasp the fiscal and deflationary implications of this credit crisis.

U.S. Dollar Vs. Euro: Expect A Turbulent Thursday
The double whammy of economic news should make for interesting trading on July 3.

U.S. Dollar (Forex): Speculation Vs. Facts
Why did the euro-dollar rally so unexpectedly on Monday (May 12)?

The newswires trumpeted the dollar's slight gain in the post-weekend trading as a sign that the greenback's decline is over, citing numerous "speculations" and "rumors." Too bad the dollar reversed on Monday morning and slid significantly against major currencies, losing almost 200 pips to the euro. EWI's Currency Specialty Service, however, has held a bearish view on the USD since Friday. Why? In short, because there is speculation – and then there are facts...

Fed Rate Cut History – as Predictable as Spam in Your Inbox

"And forecasting fed rate cuts isn’t all it's cracked up to be, or at least it doesn’t appear to warrant the countless hours of discussion devoted to it on financial television. As we’ve discussed numerous times in our newsletters, the Fed follows the market, not leads it."

Forex: Euro Vs. Dollar – Up or Down?
When "fundamentals" get confusing, technical analysis helps you cut to the chase.

You've probably noticed how conflicting the mainstream financial media's analysis of the U.S. dollar vs. euro exchange rate has been over the past few days. The European Central Bank meets on May 8 -- will that be bullish or bearish for the euro-dollar exchange rate?

Today at the Fed: “Fixing” the Financial System or Creating a Monster?

According to our Elliott Wave Financial Forecast's not-very-proprietary model for forecasting Fed rate cuts -- otherwise known as the spread between the Federal Funds rate and short-term Treasuries -- the Fed will lower rates again today. And as usual, Wall Street may well acknowledge the move by breaking out the party hats. But investors had better be careful,...

Forex: Dollar Rebounds After Hitting New Lows
Can you use the same "fundamentals" to justify both bullish and bearish market action?

The U.S. dollar fell to a new all-time low against the euro on April 16 -- mostly because of a rise in European inflation, apparently. But what if the euro-dollar moved down today instead? Can you imagine the same reason being used to justify a market decline instead? We can...

Headed For Recession: Are We or Aren't We?

From the “Today Show” to the “Tonight Show,” the Situation Room to the locker room, and the cocktail party to the carpool lane, one issue has taken center stage: U.S. recession -- Are we OR Aren’t we there yet?