In the end, it matters less that you can fight. What you fight for is the real test.
The Single currency took the bid to $1.0919 on Tuesday, finding support in a better than expected German IFO survey the previous day, which showed that the business climate began improving.
The Pound climbed from a low of $1.2163 to $1.2220, taking advantage of a softer U.S dollar and slight risk-on tones.
The Japanese yen fetched 107.83 per dollar after Bank of Japan’s Kuroda warned about downside risks to Japan’s economy
Aussie tensed up to $0.6570 despite Australia-China relations deteriorate. Beijing is reportedly considering targeting more Australian exports including dairy, wine, seafood and fruit, and also stricter quality checks and custom delays for Chinese tourists and students.
The Rand was a shade firmer at $17.56 as continued optimism over the reopening of economies from Europe to Japan remained supportive of risk appetite.
The USD/MUR opened flat at 40.45(selling) on domestic FX market.
18:00 - USD - CB Consumer Confidence (May)
18:00 - USD - New Home Sales (Apr)
- 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