The difficulty lies not so much in developing new ideas, but in escaping the old ones.
The Single currency defied gravity to $1.1626 in the afterglow of Europe's leaders agreeing on a coronavirus rescue package. July's PMI from Germany, Eurozone to provide cues on Friday.
Sterling plunged from $1.2773 to $1.2727 after the European Union's chief Brexit negotiator said that the UK had shown no willingness to break the deadlock on talks over a new trade agreement.
The safe-haven yen rocketed to 106.35 per dollar as deteriorating Sino-U.S. relations, stemming from the closure of Houston and Chengdu embassies, heightened investor anxiety.
The Aussie ran out of puff to $0.7085 following Australia's government confirmed just how much carnage the coronavirus had caused to its budget finances.
South Africa's rand trimmed its gains to 16.70 against the dollar after the central bank cut lending rates by 25 basis points to 3.50% for a fifth time in a row to support an economy strangled by the COVID-19 pandemic.
The dollar-rupee surged by 10 cents to 40.50(selling), buoyed by local economic factors.
10:00 - GBP - Retail Sales (MoM)(Jun)
11:30 - EUR - German Manufacturing PMI (Jul)
12:30 - GBP - Manufacturing PMI
12:30 - GBP - Composite PMI
12:30 - GBP - Services PMI
18:00 - USD - New Home Sales (Jun)
After rallying from bottoming all time low at 101.20 to 111.71 in covid-fueled March period, dwarfing an expanding leading diagonal ((1)) in 5 waves, USD/JPY has ever since unfolded in a corrective double three combination pattern (W)-(X)-(Y) of wave ((2)).
From an Elliott Wave trading standpoint, the pair may experience further decline to the choppy downside to complete countertrend wave (Y) because- An impulse usually retraces to at least wave (4) of previous smaller trend, that is 105.19.
- Wave (4) of wave ((1)) coincides with 61.8% Fibonnacii retracement of wave ((1)), i.e 105.19.
- 78.6% projection wave (W) through (X) targets level 105.30.
- In EW lexicon, a pullback to the previous wave (2) usually happen to a leading diagonal ((1)).
- Post-triangle thrust measurement of wave B of (Y) leads exactly to 105.20.
- USD/JPY is still trading within the bearish parellel trendlines.
Thus, hibernation of price action could be seen in the locality of 105.30/19.On the flipside, a violent recoil to revive bullish momentum at 109.84 of June 4th would nullify this set-up, warning that the potency of positioning-derived bearish signal may be ebbing.
On the hourly Chart, The USD/CAD has found strong support again near $1.3350 region yesterday. The pair fell to as low as $1.3345 before bouncing off relentlessly to as high as $1.3444 this morning.
We feel that the USD/CAD could be in an early stage of a bullish run towards $1.4017 in the coming months.
On the downside, $1.3315 remains a strong baseline , while a break below that level would open the door for further weakness on the USD/CAD near $1.3200.