Yen Yang, Dollar bang, Euro Sang

And the rupee...late for the party. The Dollar first, its a big candle since a long time and in one go the falling trendline from June is broken, and so is the 40DEMA. A 5 wave decline in wave C of 2 appears complete with the potentially looking ending wedge pattern at the end, though my count is of a 5 wave decline. This has pushed the weekly MACD into buy mode and so it should firmly set the trend irrespective of short term corrections. In wave 3 a large dollar rally will occur which could surpass last years high of 90 by a good margin.

This trend is supported by other currencies as well. The Euro that most closely mimics the dollar index broke a rising trendline from the March lows conclusively with an ending diagonal at the top where wave B retraces almost 78.6%. This should send the Euro into wave C down with a target as far as 1.2 or lower. The Yen to me [chart on right below] is the most interesting. I have long believed that it is in wave 5 down, which is the last leg down, however being a long term count the downside potential could have been large. But at the recent low of the USD/Yen chart there are positive divergences building on weekly and monthly RSIs, and momentum shown below, thougth these have yet to confirm. What it might mean is that either Yen is going to halt its advance against the dollar for a few months with upside potential upto 100-110, or that a long term trend is reversing if wave 5 down is truncated. A truncation would mean that the Yen starts a long period of depreciating against the dollar, This would be a major trend change in early stages. This needs to be watched closely for it might have lots of implications in Asia's power shift game.

Last but not the least the Rupee. Despite the big Dollar move the Rupee is still to confirm what I believe is a triangle in the throw under below a larger running triangle in wave 2 of a long term depreciating trend. After last years high of 50.58 in Oct'08 the Rupee is considered to be in wave 2 correction as shown below. Once complete wave 3 up has the potential to go to 62 or higher v/s the dollar. In wave 2 a fall below 47 is amounting to a throw under the triangle pattern, and the pattern below the neckline at 46.8 is itself a small triangle or wedge. A clear break out above 46.8 and 47 on closing basis would confirm that the rupee has indeed started wave 3 of a large fall against the dollar. Short term momentum indicators are still to confirm this trend change.