Yearly Report on FX Market USDINR

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.

USDINR from 2012 mid was trading in the down side moving channel and have made a high of 57.32per$ and 54.8 per$ and lower side higher bottom was posted at 51.36 and 51.91per$. In may 2013 breakout was seen above the higher trend line and crossover above 54.7 per$ have given sharp uptrend which we can consider as wave I as it has been after a long consolidation. Wave I traded from 53.65 per$ low to the all time high of 68.8 per$, and there was just a short halt in this uptrend. Rupee has retraced by 50% and is taking strong support near 61per$ mark and have just tested lower level of 60.9 twice forming double bottom formation and is again showing uptrend.

                Recently its trading in the range of 63per$ resistance and support of 61per$ and once higher resistance is crossed will test the level of 68.8 all time high very soon. Only crossover below 61per$ on weekly closing basis will open the level of 59.55per$ which is 61.8% retracement of wave I and reversal might be seen from lower level of 59.55pew$ which is seem to be difficult as of now.

USDINR looking from 2008 onwards where the market has taken the rally from 39.18 and tested the level of 52.18 by Jan 2009