We are actors in a play written by others
USD
EUR/USD
The shared currency resumed its decline from a high to $1.0925 to $1.0851 this Wednesday as the pandemic gloom and doom continued to favour the greenback.
GBP/USD
The Cable initially rallied to $1.2384 on Tuesday on a report that British Prime Minister Boris Johnson is stable in intensive care as he battles COVID-19 symptoms. However, the pair later retreated to $1.2322 as a jump in virus statistics and expectations of further deterioration in the conditions weighed on the pound.
USD/JPY
The yen pierced to 108.92 per dollar, with a broad rebound in risk markets encouraging some selling of the dollar, with hopes of a slowdown in the spread of the COVID-19 in some countries.
AUD/USD
The Aussie was knocked down to $0.6138 by global ratings agency S&P on Wednesday downgrading the outlook on the sovereign AAA rating from stable to negative in anticipation of a "material" weakening in the government's debt position as it splashes out a large fiscal stimulus package.
USD/ZAR
The South African's rand spiked to 18.30 against the US dollar as it managed to weather a policy storm building around a likely bailout from the International Monetary Fund.
USD/MUR
The pair tumbled to Rs39.75/USD(selling) smacked by Bank of Mauritius intervention to sell dollars at Rs39.30/USD.
• After rallying to the downside from a high of 112.22 to 101.17 amid global pandemic threat, USD/JPY has been in a correcting mode since 9th March 2020 and seemed to have recently completed an W-X-Y Double Zig-Zag structure of Wave (2) reaching a high of 111.64 on 27th March 2020.
• Two strong indicators were flashing a trend reversal: ending diagonal at Wave 5 of Wave c and bearish RSI divergence.
• On the hourly chart, as per Elliott Wave analysis, the pair might resume its downwards trend targeting 100.64 - 93.78 to unfold Wave (3), a projection of 100%-161.8% of Fibonacci level.
• USD/JPY is percolating towards its target from 110.41 to 107.84, as per chart below.
• On a side note, resumption of a bullish USD/JPY would mark an invalidation of the Elliott Wave structure above 112.22
The Single currency plunged to a low of $1.0771 last week, before trimming back some losses to $1.0825 this morning, as safe-haven demand boosted the U.S dollar higher across the board.
On a technical perspective, the EUR/USD appears to be tracking the bearish Head & Shoulders (H&S)pattern highlighted last week.
The H & S neckline, as illustrated on the 10 mins chart, could possibly act as magnet in the coming sessions that would propel the EUR/USD higher near $1.0850/75.
However, the pair still remain vulnerable to further downside possible near $1.0700 (H &S target level).
