Elliott Wave Weekly

USD/CHF Elliott Wave Analysis


USD/CHF –  0.9619

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

The greenback found support at 0.9552 last week and has rebounded, suggesting minor consolidation above this level would be seen and above 0.9700 would bring recovery towards resistance at 0.9771, however, reckon resistance at 0.9808 would attract renewed buying interest and bring another decline later. Below said support at 0.9552 would signal the decline from 1.0344 top has resumed and may extend weakness to 0.9500 but loss of downward momentum should prevent sharp fall below previous support at 0.9444 (2016 low) and reckon 0.9390-00 would hold, 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, above 0.9700 would bring a stronger recovery to 0.9771 but reckon upside would be limited to resistance at 0.9808, bring another decline later. A daily close above 0.9808 would suggest a temporary low has been formed, bring retracement of recent decline to 0.9850-60 and later towards 0.9900-10 but price should falter well below 1.0000 psychological level. 
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.