EUR/CHF – 1.2305
EUR/CHF: Wave (iv) of 3 of (C) ended at 1.3835 and wave (v) / 3 has ended at 1.0075
Although the single currency dropped quite sharply to 1.2121 late last month, renewed buying interests emerged there and euro has staged a strong rebound from there, suggesting the decline from 1.2573 has possibly ended and consolidation with upside bias is seen for test of 1.2387 resistance would be seen, however, a daily close above there is needed to signal the retreat from 1.2573 has ended at 1.2121 and bring further gain to 1.2500. Looking ahead, only breach of resistsance at 1.2515 would retain bullishness and bring retest of 1.2573, once this resistance is penetrated, this would signal the upmove from 1.0075 low (wave 3 bottom) has resumed for a stronger correction of early downtrend to 1.2650 and eventually towards 1.2762 (50% Fibonacci retracement of 1.5448-1.0075) which is likely to hold from here.
To recap our preferred count, the decline from 1.6828 (end wave (B)) is labeled as the beginning of wave (C) which should unfold as an impulsive move with 1: 1.5326, 2: 1.6377 and wave 3 is sub-divided into (i): 1.4300, (ii): 1.5880 and wave (iii) is still unfolding with (1): 1.4577, (2): 1.5448 and wave (3) is an extended 3rd with i: 1.5006, ii: 1.5383, wave iii: 1.3073, then wave iv ended at 1.3925 and wave v at 1.3073, wave (4) ended at 1.3925 and wave (5) has ended at 1.2765 which also marked the low of wave (iii) and wave (iv) has ended at 1.3835 and wave (v) as well as larger degree wave 3 has ended at 1.0075. Under this count, wave 4 has commenced and may bring correction to 1.2482 (38.2% Fibonacci retracement of 1.6377-1.0075) and later towards 1.2600.
On the downside, whilst pullback to 1.2240-50 cannot be ruled out, reckon 1.2200 would limit downside and bring another rise to aforesaid upside targets. Only below said support at 1.2121 would abort and signal the fall from 1.2573 top is still in progress for weakness to 1.2090-00 and possibly 1.2062 support but still reckon 1.2030-35 would hold, bring another rally later.
Recommendation: Buy again at 1.2250 for 1.2500 with stop below 1.2150
The long-term downtrend started from 1.9626 (Apr 1985) to 1.4166 (Sep 1995) is treated as wave (A) with A:1.6285 (Dec 1987), B: 1.9342 (May 1992) and C: 1.4166, then wave (B) ended at 1.6828 with A: 1.7147 (Feb 1997), B: 1.4398 (Sep 2001), C: 1.6828 (Nov 2007), therefore, wave (C) is now in progress with the breakdown indicated as above. This wave (C) already met indicated downside target at 1.1455/60 and 1.1300, it could have ended at 1.0075 or may extend one more fall to 1.0000 before major correction.