Adam Smith Associates - Currency Technical Analysis Report


Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

USDSGD
Last year I was bullish on the USDSGD and it turned out right. But now as the dollar is weakening I am considering alternate paths. So I wonder if the strong rally at the start of 2011 is wave 1, and not part of what looked like a triangle because of the trendlines. If that is true then the rally in 2016 was wave 5 and the move to a new high completes the pattern. This allows for a deeper correction. The Fibonacci math fit perfectly as wave 3 = 1.618 times wave 1, and wave 5 is just short of equal to wave 1. In this case going back to 1.33 over a year is possible.




Euro
The Euro completed its right shoulder of an inverted H&S pattern and is heading higher. Minor subdivisions in the Euro continue, wave III up is subdividing. 1.069 is the 20dma as the immediate resistance.


USDCNY
It has been in an up trend that is still not over. The recent correction appears complete. The fall should be followed by one more rally to new highs potentially near 7.10 based on Fibonacci targeting. Wave wise we are either in wave V of 3 of wave 5 itself. The USDCNY contract finds support near the 20 week average near 6.86. The last two rallies in the contract were ignored by the market so I wonder if this one will work as a Yuan shock.



USDINR
It started a 5th wave up in Nov and till 66.66 holds on the monthly chart this view holds ground. Also till we are only retracing what I have marked as wave 1 of 5, we are in wave 2 of 5 that should not fall below the wave 1 lof ow 66.21. We are correcting in 3 waves in wave 2 marked as a-b-c, and c is subdividing into 5 waves. The next move down in USDINR is wave v of c and the last leg of the correction before wave 3 to test 70 should start. This will be interesting to watch. If USDINR breaks 66.66 and 66.21 then it goes down to 64 and all counts change. We continue to watch this development and look for a confirmation for the alternate paths possible.



US 10 Year T Notes
The US 10 year note has retraced all the recent gains, but should have bottomed. In English bond yields are likely to fall in the US near term. It only means that wave iii did not start. Wave ii is a flat that completed yesterday and again we should attempt a third wave rally above the neckline on bonds. Rising bonds = falling yields


USDJPY
The Japanese Yen as is about to start its next wave of getting stronger. This means that the USDJPY will go down. The next wave down from the resistance at 115 should head towards the 108.3 mark


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