Understand your blind spot barrier.
The single currency steadied at $1.0870 unfazed by U.S dollar weakness after the U.S. Federal Reserve left the door open to more monetary easing on Wednesday and market awaiting for European Central Bank(ECB) monetary policy meeting due this afternoon.
The cable idled at $1.2455, following a decline below $1.2400 yesterday, as Britain showed no signs of easing its coronavirus lockdown, even as other European countries laid out plans to re-open their economies.
The yen consolidated around 106.50 against the greenback despite market optimism that Gilead Sciences Inc's experimental antiviral drug remdesivir will become the standard of care for COVID-19 after early clinical trial results on Wednesday showed it helped patients recover more quickly from the illness caused by the coronavirus.
The Australian dollar rocketed to $0.6550, cementing a remarkable recovery from the dark days of March, by benefitting from the country's success in containing coronavirus infections.
The South African vaulted to a two-week best at 18.09 against the dollar as investors found more reasons to buy risk assets with several major economies readying to reopen their economies and hopes of a coronavirus treatment resurfacing.
On the domestic market, USD/MUR held steady at 40.52(selling).
- 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