USDINR: Possible triangle in making (Elliott Wave/ Neo Wave)

USDINR is moving in a rising channel formation from past two years. As per wave analysis impulsive wave cannot move in a rising channel, so only one possibility of corrective pattern opens up which is double corrective or triple corrective pattern.

The first corrective pattern which starts from May 2014, has a three wave structure of wave a followed by wave b in a running triangle pattern and wave c in an impulse. The prices then came down in three wave structure to complete wave x. The second corrective wave is again in a tree wave pattern followed by wave x and currently prices are moving in a third corrective which is a possible triangle. If this is a triple corrective pattern it can also be labelled as (w-x-y-x-z).

Probable scenarios of triangle:

Extracting triangle (ET): In a ET which has five legs in it (a-b-c-d-e), all the major upmoves in the triangle should be smaller than its preceding up move. As of now this rule applies to the current structure. For an ET to complete, prices need to break the level of 66.50 in faster time as the thrust of triangle has to be more vulnerable. An ET will only negate if prices move above 67.75 which will open the next scenario of Symmetrical Triangle.

Symmetrical Triangle (ST): If the level of 66.50 is broken but the momentum is slow enough, then it is a ST formation, which will  break the rising channel formation and then move in a sideways direction to complete it.

If it is an ET formation it will also look like a topping Head and Shoulder formation, which will give a breakout once the multiple support area is taken out which is 66.50 levels.

In short, there is a high possibility for a triangle to form at current levels. This triangle can be extracting or symmetrical but will not be Neutral or expanding triangle.If prices break the level of 66.50 at fast pace the possibility of ET is high if not then it will eventually end up forming ST.

Daily chart of USDINR