USD / IDR time for a correction - because everything corrects
This is 100% technical analysis and 0% fundamental analyis. I would like to see for myself if TA can stand on its own.
By my count there is some strong bearish divergence shown on the RSI . Three higher highs have translated to lower highs on the RSI , indicating slowing momentum. When that slowing momentum is also coincident with what seems to be (I only spent 5 mins on it) wave 5 of 5. Since this is the first time I have looked up the currency pair on a technical chart it would be unlikely that I did so "at the top" but right now it is a plausible scenaro.
Saying that I would normally expect wave 5 to at least reach the top of the channel, and of course, normally top the wave 3 high as well. However, it seems a real posibility that it will fall short. The IDR has been weakening for years and a correction may be warranted - especially if the USD loses strength.
What will happen now is the start of a small correction (to start with to the lower trend line ) but keep an eye on signs that the correction may be steeper or deeper. If the lower trend-line is broken with momentum and volume I would stay in the short trade. Because wave 5 (if it turns out to be the wave 5 top) is truncated (lower) it would indicate there is significant downward pressure and the correction could be swift.
My other scenario is a lot more bullish ; that this is just sub-wave 1 of the larger degree 5th wave up. This would mean all time highs for IDR in a year or two.
I am not "trading" IDR but keeping an eye on it. I don't trade FOREX - mainly commodities like bitcoin , silver , gold , and crude. This is published for my own education. Comments welcome. Let's see how it turns out.
By my count there is some strong bearish divergence shown on the RSI . Three higher highs have translated to lower highs on the RSI , indicating slowing momentum. When that slowing momentum is also coincident with what seems to be (I only spent 5 mins on it) wave 5 of 5. Since this is the first time I have looked up the currency pair on a technical chart it would be unlikely that I did so "at the top" but right now it is a plausible scenaro.
Saying that I would normally expect wave 5 to at least reach the top of the channel, and of course, normally top the wave 3 high as well. However, it seems a real posibility that it will fall short. The IDR has been weakening for years and a correction may be warranted - especially if the USD loses strength.
What will happen now is the start of a small correction (to start with to the lower trend line ) but keep an eye on signs that the correction may be steeper or deeper. If the lower trend-line is broken with momentum and volume I would stay in the short trade. Because wave 5 (if it turns out to be the wave 5 top) is truncated (lower) it would indicate there is significant downward pressure and the correction could be swift.
My other scenario is a lot more bullish ; that this is just sub-wave 1 of the larger degree 5th wave up. This would mean all time highs for IDR in a year or two.
I am not "trading" IDR but keeping an eye on it. I don't trade FOREX - mainly commodities like bitcoin , silver , gold , and crude. This is published for my own education. Comments welcome. Let's see how it turns out.
Comment:
I was a bit early in my call, it should be heading for the lower trend-line at least