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EUR/CHF Elliott Wave Analysis

EUR/CHF : 1.0947


EUR/CHF: Major wave 5 trough ended at 0.8426 and correction has commenced from there for subsequent gain towards 1.1400-1.1500.


As the single currency has surged again after brief pullback to 1.0792 and broke above indicated previous resistance at 1.0899, adding credence to our view that low has been formed at 1.0631 (Feb low) and consolidation with upside bias remains for the rebound from 1.0631 to extend further gain to another previous resistance at 1.1001, break there would provide confirmation and extend the rise from 1.0622 low (2016 low) to 1.1018, then 1.1050 but reckon resistance at 1.1107 would limit upside and price should falter well below 2016 high at 1.1129. 


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. The selloff from 1.2650 signals wave 4 has ended there and we are taking a view that the wave 5 could also have ended 0.8426, hence consolidation is seen with mild upside bias for rebound to 1.1000 first, then towards 1.1400.

On the downside, whilst initial pullback to 1.0900-05 cannot be ruled out, reckon downside would be limited to 1.0870-75 and bring another rise later. Below 1.0825-30 would defer and suggest top is possibly formed, bring weakness to said support at 1.0792 but only a daily close below there would add credence to this view, then further fall to 1.0780 and possibly previous minor resistance at 1.0720 would follow. Looking ahead, only a drop below 1.0720 would suggest top is formed instead, risk weakness towards said support at 1.0656 first.

Recommendation: Buy euro at 1.0905 for 1.1105 with stop below 1.0805.

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 0.8426, consolidation with mild upside bias is seen for gain to 1.1000 and later towards 1.2000.

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