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The fiber surged to $1.1260 on news from ECB policy maker Villeroy de Galhau that the European Central Bank will need to keep monetary policy loose until its inflation target is clearly in sight. Eurozone confidence data due at 13:00 and German inflation figures at 16:00 may set the tone for the latest gauge of the region's economic health.
The cable bounced off from a low of $1.2313 to $1.2382 as PM Johnson is expected to announce a major new infrastructure plan on Tuesday to "get Britain moving again".
The Safe-Haven Japanese Yen mounted to 107.11 against the greenback on risk aversion, shrugging off Japan’s Retail Trade and Large Retailers’ Sales which fell considerably.
The Aussie reversed losses from a low of $0.6847 to $0.6880 following Australian PM Morrison upbeat interview on the reopening up of the state borders in the country, despite the alarming rise in the coronavirus outbreak in the no. 2 populous state of Victoria.
South Africa's rand slipped to 17.30 against the U.S. dollar as concerns about a surge in coronavirus cases globally continued to weigh on hopes of a swift economic recovery.
On the domestic market, the dollar-rupee remains unfazed at 40.50(selling).
18:00 - USD - Pending Home Sales (MoM)(Jun)
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.