German DAX Suggests More EURUSD Weakness After The Pull-back

German DAX is in down-trend in this week same as EURUSD from 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 me that for near-term predictions on EURUSD we should focus on DAX more often and not so much on US stock market which is still in uptrend. OK, now let’s go to see DAX intraday structure. I 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.

DAX 30min Chart - Elliott Wave Forecast http://bit.ly/XIEuPw

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

EURUSD 1h Chart - Elliott Wave Forecast http://bit.ly/XIEuPw