Tracing the USD/INR price movement ever since its break above the trend-line a year back, one finds the unfolding of the typical impulse Elliot wave pattern.
In the above evaluation, I’ve applied 2 major rules of Elliot wave principle , viz.
• The bottom of the fourth wave, which is a pullback, cannot overlap the peak of the first rally. If it does, then it’s not a fourth wave.
• The third wave is never the shortest wave
If the above wave count is right, it appears that despite things looking extremely bleak for the rupee, we may in fact be in the final 5th wave of the impulse that should set the stage for a 3 wave corrective rally (rupee appreciation) that should typically ensue to complete the elliot pattern.
Where the 5th wave would end is still at the moment a wild guess, given that there are no overhead resistances to refer to, but by applying Fibo ratios to project, the following emerges as key probable areas of topping:
53.30, 54.50 and 55.40
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