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The single currency retreated to $1.0935 this morning after rallying to an intra-day high at $1.0976 in Europe yesterday on continued optimism over Franco-German proposal for a recovery fund together with upbeat German and EU ZEW sentiment data.
In the UK, the British Pound firmed at $1.2256 ahead of Consumer Price Index (CPI) for April month due today.
The Yen sparked a broad slump to 108.00 level on Tuesday after Bank of Japan announced it will hold an emergency policy meeting on Friday( 0000 GMT) to sign off on a new lending program to helps firms combat the fallout from the coronavirus crisis.
The Aussie held onto gains to $0.6545 despite a Bloomberg report showed China was considering targeting more Australian exports including wine, seafood, fruit, and dairy, adding to the 80% tariff imposed on barley and restrictions placed on meat from some of Australia’s largest abattoirs.
The Rand inched up to 18.33 per dollar, tracking higher commodity prices and spurred by optimism about the re-opening of economies around the world, amid SARB interest rate decision on Thursday.
On the domestic market, the USD/MUR unfazed at 40.30(selling).
10:00 - GBP - CPI (YoY)(Apr)
13:00 - EUR - CPI (YoY)(Apr)
16:30 - CAD - Core CPI (MoM)(Apr)
17:30 - GBP - BoE Gov Bailey Speaks
18:30 - USD - Crude Oil Inventories
22:00 - USD - FOMC Meeting Minutes
- 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