The early signs this Season that the dollar trend can change

Published: Sun, 12/26/21

Dear ,

It has been a long wait to start seeing the dollar fall again. And the good news is that everyone now believes that fundamentally there is only good reason that the dollar should rise. But currency markets more than any other are driven by flows and for that reason technical analysis and in particular Elliott waves can work better. This week many EM currencies closed up against the dollar. Is this a lead indication of a trend change? It could be as we head into the seasonal period for these things. The charts I share from this week are indicating this possibility

Rohit Srivastava

The Truth About the Markets

Today's Updates

Euro

The Euro remains inside a triangle-looking pattern. Unless we breakout above 1.135 and close above the 40dema at 1.137 we might still not be done forming a triangle. Wave d appears may be complete, and wave e down to 1.1235 is still pending.

USDINR

Rohit's momentum crossed over to the sell-side and USDINR closed below the 20dma. This fits with the first scenario laid out in the long short report. An ending diagonal in wave E, that is truncated. Truncated means we did not make a new all time high. A 78.6% retracement is all we got in the final leg. Now till new evidence shows up we are in a new bear market for USDINR. For starters let us watch if the lower end of the wedge breaks so that is the first support at 74.53.

Here is a big picture chart of the long-term wave count to put it in context.

USDBRL

USDBRL has been behaving in a way out of line from what the dollar was doing for most of 2020. Off late though they may appear correlated. USDBRL has often also been a good signal of what the USDINR may do as it follows a similar path despite differences in wave count, with some lead. So the rising USDBRL in wave E was not matching the strength seen in equities. Now it is the same for USDINR too. But that is coming to an end. The USDBRL fell last night and is very close to the top end of the triangle at 5.782 that it could be done. The move can truncate, or make one last gasp at the upper line. But once it reverses it will be a signal of a larger reversal against the dollar. Now the AUD has already started to rise, and the CNY did not budge and remains strong against everything anyway. So how long can the Dxy hold out? This is interesting as individual currency charts are signaling a dollar bear ahead.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Rohit Srivastava
www.indiacharts.com
For accurate market analysis. Technical analysis is a study of past data to assess future probable outcomes. It is our endeavor to discuss high probability set ups for traders and investors in good faith. However this is not a solicitation to buy or sell stocks futures or options or any security. Trading in any financial market should be done with sound knowledge and the help of a qualified investment adviser. Stocks based on the Elliott wave model are based on the Fibonacci fractal of the market and momentum indicators, Levels are based on Fibonacci maths and are only indicative of what the mathematical model throws up. Readers may download the free Elliott Wave Calculator to do it themselves. This is not a research report. We are not investment advisors This is not a recommendation to buy/sell.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Value Wave Stocks discusses the short term trading set ups that we use while taking our trading decisions. Value wave Investments. discusses the long term set ups that we use while taking our investment decisions. We may have holdings in these stocks and are interested in these opinions. This is not the only reason considered while taking our actions. Kindly take the help of a qualified investment advisor before trading. We have active open long and short positions in the futures/options/stock/commodity/currency markets at any point of time. The opinions here are for your education and understanding only of how we identify stocks to trade/invest in. We change our opinion daily and even hourly. Any actions taken by you are at your own understanding and risk. We do not offer personalised advise or research of any kind.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
You have received this mail because you signed up for it on our website and agree to our terms and conditions and privacy policy listed there. If not, you may unsubscribe with the link below at any time.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Please do not reply to this message. email to indiacharts@gmail.com