USD/CHF Elliott Wave Analysis

USD/CHF - 1.0916

USD/CHF - Further consolidation in wave b above 1.0370 support

The greenback moved in line with our expectation in our previous update that further consolidation would take place and our preferred count remains that the wave (c) of larger degree triangle wave b has ended at 1.0592, mild upside bias remains for gain to 1.1026. However, it is necessary for a daily close above there to add credence to our bullish view and rise to 1.1167 (50% Fibonacci retracement of 1.1742 to 1.0592) would follow but still need to break 1.1263-1.1303 (chart resistance and 61.8%) to confirm the (d) leg is underway towards eventual upside target at 1.1442 (61.8% Fibonacci retracement of entire (b) leg from 1.1967).

Our preferred wave count on USD/CHF is that early selloff to 0.9630 is treated as an end of the larger degree wave (C) and major correction is unfolding from there with a leg of a larger degree wave A ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), then wave b is now in progress which is likely developing into a triangle with the breakdown as follow: (a): 1.0370, (b): 1.1967, (c) has either ended at 1.0592 (our preferred scenario) or may extend marginally towards 1.0450 but the support at 1.0370 (the (a)-leg trough) should remain intact.

In the event price drops below the support at 1.0370, this would abort our triangle scenario and then the (c) leg of larger degree wave b would extend to 1.0200, however, we still expect 1.0011-1.0039 (previous support and 100% projection of (a) leg from (b)) to contain this wave (c), then a strong rebound in larger degree wave c shall take place thevdreafter.

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) which ended at 0.9630 (Mar 2008). Under this count, a major correction is now in progress with a leg of larger degree A just ended at 1.2298. If price drops below1.0000, this would suggest only wave III (our alternate count) has ended at 0.9630, then the final wave V of (C) would extend weakness to 0.9500.