Yet structurally, the larger trend kept asserting itself.

Back in 2011, when I projected a long-term depreciation cycle toward levels that seemed improbable at the time, the overwhelming institutional consensus was still looking for Rupee strength — some forecasts even projected 38/USD.

Again in 2013. Again in 2017. Again in 2019.

Today, with USDINR continuing to print historic highs even in 2026, it raises an interesting question:

How much of market behaviour is truly driven by the “reasons” we attach to it afterwards?

And how often do those reasons simply emerge after the structure is already in motion?

One of the most misunderstood aspects of Elliott Wave analysis is that it is not attempting to predict news, economics or events.

It attempts to identify the underlying behavioural structure of markets before consensus narratives adapt to it.

The uncomfortable reality for many fundamental frameworks is that markets often move first — and explanations arrive later.

Not always. But often enough to matter.

That distinction becomes especially important at major turning points.

GBPINR Daily Charts with Harmonic pattern

Legal Disclaimer: This post gives an idea of how a trader chooses low risk entry points for trading and hence what you see in this post is for educational purpose only. This is no solicitation to buy, sell or hold any securities. I’m not a registered investment advisor and I strongly urge you to consult one if you are going to act on the above idea. If you decide to take action on the above idea, you are agreeing that you take full responsibility for the profit or loss that you may sustain based on such decisions and agreeing to indemnify the author of the same. You may have seen me on TV suggesting successful trade ideas but remember trading is inherently risky and past performance is no guarantee of future outcome.

Note: This was a premium post and has now been unlocked. Trade did not trigger as it did not sustain above 101.82 for an hour.

Pound sterling breaks out of a 4 year triangle

Cable’s monthly chart (above) with its Elliott Wave count shows that the currency is embarking on its 5th wave of decline. The target for this breakout is mammoth – Over the next 12-24 months we are very likely to see a level of 1.345 at the very least but will not be surprised if we see a level of 1.165.

When such a large text book pattern comes to fruition, clearly there will be some economic/fundamental tail wind supporting it. We are not going to bother ourselves with those and will leave it to the economists to decode that for us. However, we need to be aware  that such a large movement in a major currency is unlikely to occur in isolation. The Dollar will very likely strengthen against other major currencies. This is terrific news for Dollar Index bulls and bad news for many risk assets including precious metals and equities that rely on weak dollar forever.

Disclosure: I’m short sterling since January 2013 from 1.6113.

INR - Breakout from a consolidation

A narrow consolidation after a powerful move and a wide range bar. The next stage of Rupee weakness is here.

INR - Breakout from a consolidation

A narrow consolidation after a powerful move and a wide range bar. The next stage of Rupee weakness is here.

Indian Rupee - Triple bottom

If the currency pair ends today above 46.1 today (a weekly closing), it would be closing above its weekly “cloud” for the first time since August 2009. This would be another bearish sign for the Rupee (I recall turning bullish on the Rupee in April 2009.)

Indian Rupee - Weekly Ichimoku charts

In 2008, when INR closed above the “cloud”, the Rupee weakness lasted several months until it peaked at the level of 52.18.

If we look at the movements of the INR from an Elliott wave perspective – it does look like USD/INR is in it’s early stages of its powerful wave 3. The triple bottom low of 43.85 is just a shade over the 62% fibonacci retracement level of the move from the 2008 lows to the March 2009 high. This is a very common wave relationship.

Now comes the staggering bit – if my wave labelling is correct, the potential for the Rupee over the next several months, works out to at least a little over 57 and a typical wave 3 relationship would take the rupee to a level of 65!!!!

So there it is, another asset class that is closely related to the Indian stock market’s price movements, reiterating the bearish case for India.