If two people always agree, one of them is redundant.
The single currency plummeted to $1.0838 following Germany's highest court on Tuesday gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank as a participant in a scheme aimed at cushioning the economic blow from the coronavirus.
The cable tumbled to $1.2430 as UK's death toll from COVID-19 is nearing 30,000, surpassing Italy despite substantially flattening the curve.
The yen soared to 106.30 per dollar on worries about a bumpy global recovery spooked investors amid the constitution Day holiday in Japan, while U.S ISM Non-Manufacturing Purchasing Managers' Index plunged to 41.8 points in April.
The Australian dollar percolated around $0.6444 despite Australian retail sales rose 8.5% year-on-year in March, where the rise in spending could be associated with the panic buying seen ahead of the coronavirus-induced lockdown.
The South African rand cascaded to 18.42 against the greenback as markets are awaiting a retaliation from Beijing on a threat of fresh tariffs on Chinese goods from America.
On the domestic market, the USD/MUR extended gains for the third trading day of the month by 20 cents to 40.70(selling) underpinned by U.S dollar strength.
12:30 - GBP - Construction PMI (Apr)
16:15 - USD - ADP Nonfarm Employment Change (Apr)
18:30 - USD - Crude Oil Inventories
- 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