There is a time to go long, a time to go short and a time to go fishing.
The single currency managed to hold gains near $1.0850 after worse than expected US inflation figures, the lowest reading since 2015, and ahead of Powell speech at 17:00 amid rising speculation the United States could adopt negative interest rates.
The cable plummeted to $1.2270 this morning as persistent confusion over government plans to ease lockdown measures, the worse COVID-19 death toll in Europe, and revived Brexit risks all weighed on the pound. Market awaiting today’s slew of UK economic releases including GDP figures.
The yen extended gains to 107.20 versus the U.S dollar as the US-China trade war and virus outbreak fears loom.
After recovering to a high of $0.6530 yesterday, the Aussie fell again to $0.6470 today as the trade war with China joins hands with the broad risk-off sentiment.
The South African rand firmed at 18.36 per dollar on Tuesday as demand for emerging markets was boosted after China waived tariffs on certain U.S. imports yesterday.
On the local market, the USD/MUR clawed back gains to 40.30(selling) this morning undermined by Bank of Mauritius’s intervention for three weeks in a row.
10:00 - GBP - GDP (QoQ)(Q1), GDP (YoY)(Q1)
10:00 - GBP - Manufacturing Production (MoM)(Mar)
10:00 - GBP - Monthly GDP 3M/3M Change
16:30 - USD - Crude Oil Inventories
- From an Elliott Wave standpoint, USDCHF could potentially unfold into compelling impulsive Wave C of the zigzag correction of Wave (2) to a narrowing region 0.9550 (50% retracement of Wave (1)) to 0.9395 (100% projection of Wave A through B) in the near term trend, from the downside bias from April 6th high of 0.9797.
- Price could immediately start to shoot back up into Wave (3) on a longer perspective.
- Piercing above the resistance 0.9905 would endorse the structure.
- Alternatively, broader bearish invalidation of Elliott Wave Structure rest at 0.9191 of March 9th low while Relative Strength Index signals a bullish recoil higher for the pair.
• 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.
• At 107.70 today, USD/JPY is percolating towards its target from 110.41 to 107.84, as per chart.
• On a side note, resumption of a bullish USD/JPY would mark an invalidation of the Elliott Wave structure above 112.22