Tuesday, July 10, 2012

USDINR - Elliott Wave Analysis

This is the close only chart of USDINR. Some interesting patterns are evolving in this chart. I have marked two possible counts on the chart, one suggests that we are forming wave [4] and may test 54 - 53 band on the downside before embarking o n wave [5]. It is our preferred count. Whereas my alternate count suggests an expanded flat in wave (4) and the current rise may continue till the 58 - 59 band to complete the wave [3], that's our alternate count. In that case we have to take out the crucial resistance of 56.60 level on USDINR. But if we get resisted by the lower channel boundary, the preferred count gets precedence. The momentum indicators are supporting the alternate count, the MACD is forming a possible ZLR, but usually on 4th waves, the MACD dips below the zero level, then sets itself up for a divergence on 5th waves. STS and RSI formed a negative divergence earlier, which sits pretty well on the waves (3) and (5) of [3] as per our preferred count. So the charts are a bit divided over these two counts, I suggest, keeping 56.60 as SL and be short in anticipation of prices falling again to test the 54 - 53 band. One can reverse positions to long once 56.60 is taken out, or wait for the prices to correct to the 54 - 53 band for a low risk entry. This price action is suggested if you have to trade, my personal choice is to stay out as we are close to some stiff resistances and also we are in the last stages of this 5 wave structure, the next meaningful advance if it happens will have to be only after a meaningful correction to this up move from 48.445 levels.

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