It always seems impossible until it's done.
The Single currency soared to $1.1724 this morning, as intensifying Sino-U.S. tensions added to worries of a quick recovery in the world's biggest economy.
The Cable surged to $1.2828 and set its biggest weekly gain since the first week of June, although investors remained cautious about data pointing to economic recovery.
The Japanese yen burst to 105.62/dlr as an intensifying U.S.-China row hammered the dollar heavily.
The Aussie dollar trimmed losses to $0.7138 after RBA's assistant governor Kent said that Australia's central bank is ready to buy government bonds if needed to maintain a 0.25% yield target.
The South African rand spiked to 16.585 against the greenback in line with strength in other emerging market currencies as geopolitical and economic concerns dented the greenback.
The dollar-rupee mounted by 5 cents to 40.55(selling) on the domestic market.
12:00 - EUR - German Ifo Business climate index
16:30 - USD - Core Durable Goods Orders (MoM) (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.