Wednesday, October 18, 2006

US Trade Gap Data

U.S. Trade Gap Hits New High? Yawn...

Thursday morning (Oct. 12), the financial headlines reported that the U.S. trade deficit reached a new all-time high. Bad news for the dollar, right? No question. But the greenback barely gave 50 pips to the euro after the news. And then, on Friday morning (Oct. 13) – despite the record trade gap, a rise in weekly U.S. jobless claims, and an unexpected drop in retail sales – the USD came roaring back, gaining almost 100 pips against the EUR toward the close.

If you think that makes no sense, you’re not alone. Last year, every currency analyst who was bearish on the dollar named the rising trade gap as one of the main reasons for the buck's imminent collapse. Instead, 2005 turned out to be one of its best-performing years ever.

Still, month after month, many forex analysts continue to expect from the USD a straightforward reaction to the trade gap figures. And when they don’t get it, they look for other reasons why the dollar is staying supported.

But why reinvent the wheel when the one and only reason for the dollar’s strength this week – forex traders bullish mindset reflected as an Elliott wave pattern – has been staring you in the face from the EURUSD charts?

Elliott Wave analysis of education, training, news, trading signals, fourms, and trading software to learn how to trade with human nature instead of the data, and its repetitive nature which has predictive value.

Click the US Trade Gap Data header link above to learn about human nature and how to trade with it to keep reward high and risk low.

Good day and good trading.