Elliott Wave Weekly

USD/CHF Elliott Wave Analysis


USD/CHF –  0.9583

USD/CHF – Wave IV ended at 1.1730 and wave V has possibly ended at 0.7068

The greenback has dropped after meeting renewed selling interest at 0.9757, suggesting the decline from 1,9344 top is still in progress and downside risk remains for further weakness to previous support at 0.9444 (2016 low), however, a sustained breach below this level is needed to retain bearishness and extend further decline to 0.9390-00, then towards 0.9350, however, as broad outlook remains consolidative, reckon downside would be limited to 0.9300 and previous support at 0.9259 should remain intact, bring rebound later.

Our preferred count on the daily chart is that early selloff to 0.9630 is an end of the larger degree wave III and major correction is unfolding from there with a leg ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b ended at 0.9910 with (a): 1.0370, (b): 1.1967, (c): 0.9910. The rise from there to 1.1730 is the wave c which also marked the end of wave IV and wave V has possibly ended at 0.7068.

On the upside, whilst recovery to 0.9600 cannot be ruled out, reckon upside would be limited to 0.9647 and price should falter below previous support at 0.9676, bring another decline later. Only a daily close above 0.9676 would defer and suggest a temporary low is possibly formed, bring a stronger rebound to 0.9710-20 and possibly test of resistance at 0.9738 but price should falter below indicated resistance at 0.9757, bring another selloff later.
Recommendation: Stand aside for this week,

Dollar's long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) with wave III ended at 0.9630 (Mar 2008). Under this count, correction in wave IV has possibly ended at 1.1730 and wave V already broke below support at 0.9630 and met indicated downside target at 0.7500 and 0.7400. The reversal from 0.7068 suggests the wave V has possibly ended and the breach of resistance at 0.9595 add credence to this view and indicated upside target at 1.0000 had been met, however, the sharp retreat from 1.0296 to 0.7401 suggests choppy trading would be seen but price should stay above said record low at 0.7068.