I know where I’m getting out before I get in.
The shared currency consolidated near $1.0949 in early Asian session as China reported the highest number of new daily cases in nearly six weeks and fueled fears about the second wave of COVID-19 outbreak.
The Cable spiked to $1.2505 after Prime Minister Boris Johnson left the hospital for treatment of COVID-19, the illness caused by the coronavirus.
The safe-haven yen rallied to 107.80 per dollar amid coronavirus-led risk-off US dollar pullback.
The Aussie sidelined at $0.6345 as investors shunned risky trades while waiting for Tuesday’s Chinese trade data to provide fresh clues.
The South African's rand firmed at 18.07 against the greenback despite its economy remained gloomy amid Covid-19.
The pair stayed put at Rs39.75/USD(selling) on the domestic market, tracking thinned holiday trading amid Easter Monday.
• 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).