The U.S. dollar/Swiss franc (USD/CHF) currency pair has made a big pullback since end of 2015 that we see it as a corrective and temporary decline. Notice that falling price action was overlapping; thus it has evidence of a contra-trend movement so we suspect that downtrend is finished now, especially after we identified an ending diagonal in wave C-circled of a big wave IV. Ideally market is now at first wave up of a new bullish cycle; three wave structure for wave V that will be looking for a move back to the highs. That said, current sharp turn down can be wave B, so blue wave C could then be an extended wave.
On the lower time frame, recent decline from 0.9950 is very sharp so a temporary top in place has to be considered, especially as we can count five waves up in wave A-circled, so actually current weakness is not such a big surprise. That said, we will continue to look higher after a completion of a wave B that may find a base this week at 0.9600-0.9700 area, which may lead to a new push higher into wave C of five as suggested on the daily chart.
About the Author
Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/
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