US Dollar v/s Leading Currencies - Technical Analysis
USDGBP
It has fallen in 3 waves so far, marked a-b-c. In my last note I
considered the case of a Long term top in the contract. But prior to that i was
keeping it as the last man standing in my bearish dollar call. So in the short
term charts I keep that open just in case. If we are in wave 4 then near the
lower end of the channel with the recent oversold RSI reading, maybe we have a
bottom. Wave 5 up may just show up, even if it is s double bottom. Short term
we should first test the averages at 0.788 and 0.792, Once we close above both
then we can test the upper end of the channel at 0.821. We may rally into the
coming Brexit vote that might make for the wave 5 top then.
USDJPY
It bounced back
from the lower end of a falling channel. It did not complete a 5 wave decline
as I was anticipating so the markings have changed from a-b-c to w-x-y showing
a complex formation. Either we are going up in an x wave up to 113.50, or, if
we breakout above 113.50 a new move up may have to be considered. 61.8% of the
entire fall is at 114.65 as the next important resistance level.
It completed a decline at C=A in a channel as shown. The wave counts
for the entire rise are very awkward but this is best what I can think up for
now. An A=B=C decline in the final waves of wave 4, that was a complex pattern.
The implications are quite bullish. The recent lows can mark a bottom for a
larger degree move higher to resume. 34.28 is the low. The first channel
breakout level is at 34.90 and the larger channel for the entire wave 4 pattern
is at 35.88.
It has completed a complex correction. Complex patterns end in wave z.
Above 13.30 the currency pair would be out of the falling channel into a
possible up trend. The trend up could be an X wave that retraces the decline of
the start of a larger 3rd wave. We will know as more evidence develops. But the
downside maybe done for now.
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
