Fearlessness is the mother of reinvention.
The shared currency slumped to a low of $1.0855 as a flight to safety bid pushed the dollar higher on Thursday after dismissal US retail and factory data showed the severity of the collapse in U.S. economic activity caused by the novel coronavirus outbreak.
The Cable mounted from a low of $1.2455 to $1.25 as Brexit discussions restarted on Wednesday, with the UK and EU chief negotiators meeting to agree the schedule for their next negotiating rounds.
The safe-haven yen nosedived to 107.70 against the dollar amid USD risk-off correction following International Monetary Fund gloomy economic outlook on global growth.
The Aussie nosedived to $0.6262 from $0.6444 despite Australia's unemployment rate ticked up only modestly in March.
The South African rand plunged to 18.60 against the greenback as concerns grew of a deep global recession concentrated in emerging markets, forecasted by IMF that Sub-Saharan Africa's GDP would shrink 1.6% because of the combined effects of the disease and plummeting oil and commodities prices.
The pair surged by 30 cents to 40.25 (selling) on the domestic market, tracking gains on the U.S dollar across the board.
- 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