Dreams are a great test. Because a dream is going to test your resolve.
The fiber lost altitude to $1.1238 on news from IMF that global output to shrink by 4.9%, compared with a 3.0% contraction predicted in April, while U.S moved to maintain pressure on the EU in a 16-year dispute over aircraft subsidies by flagging possible changes in tariffs on EU goods, as the date for a decision on reciprocal EU duties slipped to the autumn. Focus on ECB minutes at 3:30 pm.
The Sterling cascaded to $1.2412 as the U.S threatened to levy tariffs on $3.1 billion of exports from the United Kingdom, France, Spain, and Germany, shrugging off Brexit optimism.
The Japanese yen nosedived to 107.14 per dollar on reports from Governor Koike that the daily number of new coronavirus cases in Tokyo climbed to 55 on Wednesday the highest tally in 1-1/2 months after a cluster of infections was found at an unnamed office in the Japanese capital.
The Aussie plunged to a low of $0.6865 as the dollar gained on fears that rising coronavirus infections could develop into a second-wave outbreak that diminishes global economic recovery prospects, undermined hopes for a quick turnaround in the pandemic-hit economy and prompted traders to cuts bets on riskier currencies.
South Africa's rand dipped to 17.44 against the greenback after Finance Minister Mboweni announced a wider budget deficit and soaring debt in an emergency supplementary budget in condemn that treasury projected the budget deficit would widen to 14.6% of the gross domestic product in the 2020/21 fiscal year, from a shortfall of 6.8% of GDP seen in February.
Dollar-rupee bolstered by 20 cents to 40.50(selling), tracking a bullish U.S dollar across the board.
15:30 - EUR - ECB Publishes Account of Monetary Policy Meeting
16:30 - USD - Core Durable Goods Orders (MoM)(May)
16:30 - USD - GDP (QoQ) (Q1)
16:30 - USD - Initial Jobless Claims
On the hourly chart, in an Elliott wave perspective, the upward correction that started on 18th of May 2020 to 11th June high of $1.2815 appeared to be a wave B within the April-June 2020 irregular flat decline (a)-(b)-(c) . A flat is a sideways, three-wave corrective pattern labelled A-B-C. Wave A (1.2078-18th May) and Wave B are always corrective waves (3-wave decline), while wave C is always a motive wave (5 wave structure). Actually, Wave C seems to be underway with one or two legs to the downside, completing wave 2, while a bearish contracting Diagonal pattern looming ahead.
Technically, we expect the bearish scenario on the GBP/USD to find its first strong support near $1.2170 printed on 7th April 2020 , as the Wave principle holds that the limit of any market correction tend to register their maximum retracement within the span of travel of previous fourth wave of lesser degree. However, a break below that level could open the door for further decline near $1.1888 (a 61.8% Fibonacci percentage of previous March-April 2020 impulsive rally).
On the other hand, a bullish move on the GBP/USD is expected to meet interim contention around $1.2694 and a breach of this area on a sustainable basis could open the door to a probable visit to the high of $1.2815 printed on 10th of June.
From an Elliott Wave trading standpoint, USD/CHF indicates a violent recoil higher in compelling impulse Wave (3) trajectory on a test of support marked by the confluence of a former counter-trend support at Wave (2) at 0.9372 of June 11th, percolating since late March 2020. As we have continued to highlight, the trend USD/CHF remains bullish overall.
Looking at the hourly chart, the pair may propel into Wave (3) targeting 1.0084, which represents 100% Fibonacci projection of impulsive Wave (1) through corrective Wave (2). Peeking through 0.9553 of Wave (1) would further validate the upside momentum. On the flipside, a set-back of recent low at 0.9418, then 0.9372 would render the count obsolete. If the pair fails to clear the latter, it could catalyse an aggressive decline.