USDINR Elliot wave Pattern Target of 73.2 - 79.5

USDINR (Rupee) after the breakout above 54.5 which was symmetrical triangle pattern has given a sharp upside move where it has also shown the formation of the Elliot wave pattern. Currently it is trading in the wave five after testing the lower support of 55.7 Spot and is showing sigh of reversal. If recent support of 55.7 is holding then wave five will either test 100% of wave I which can test the level of 73.2 per$ and further if sustain above 73.5 is seen then my next expected target is 79.5 which is series rise from 100 – 142 – 185 where 185% rise is expected. Looking at the working shown below 185% comes to 79.5 per $ spot market in near to medium term.

Some fundamentals which will support the expected target of 79.5 $ are as follow.

            1: Expected Oil price to test 153$ from Current price of 114$ per barrel can check Blog update on 9^th Aug 13

            2: Fall in Financial Market where Nifty is expected to test 4500 soon which will bring outflow of FII.

            3: Expecting some Debt Default coming soon, this will hit Banking sector soon.

 

 

Principle of Elliot wave explained

 

Basic Sequence

There are two types of waves: impulse and corrective. Impulse waves move in the direction of the larger degree wave. When the larger degree wave is up, advancing waves are impulsive and declining waves are corrective. When the larger degree wave is down, impulse waves are down and corrective waves are up. Impulse waves, also called motive waves, move with the bigger trend or larger degree wave. Corrective waves move against the larger degree wave.

 

Three Guidelines

There are numerous guidelines, but this article will focus on three key guidelines. In contrast to rules, guidelines should hold true most of the time, not necessarily all of the time.

Guideline 1: When Wave 3 is the longest impulse wave, Wave 5 will approximately equal Wave 1.

Guideline 2: The forms for Wave 2 and Wave 4 will alternate. If Wave 2 is a sharp correction, Wave 4 will be a flat correction. If Wave 2 is flat, Wave 4 will be sharp.

Guideline 3: After a 5-wave impulse advance, corrections (abc) usually end in the area of prior Wave 4 low.

Three Rules

Believe it or not, there are only three rules when it comes to interpreting Elliott Wave. There are many guidelines, but only three HARD rules. These are unbreakable. Guidelines, on the other hand, are bendable and subject to interpretation. Furthermore, these rules only apply to a 5-wave impulse sequence. Correction, which are much more complicated, are given more leeway when it comes to interpretation.

Rule 1: Wave 2 cannot retrace more than 100% of Wave 1.

Rule 2: Wave 3 can never be the shortest of the three impulse waves.

Rule 3: Wave 4 can never overlap Wave 1.