Elliott Wave Analysis of the USD/CHF Currency Pair by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.
Since my last post a few hours ago, the dollar has strengthened against the Euro by 120 pips (so far), and I must admit, the price action appears impulsive. Also, the British Pound (GBP/USD) is following through in what I’ve been expecting to be the early stages of a wave 3 to the downside, in keeping with the wave count I’ve been showing in my weekend webinars for weeks. My confirmation point in the EUR/USD for the trend change is still at 1.40545.
However, while these events suggest that the long awaited trend change actually did finally commence two days ago in the Euro, the dollar has actually weakened in a small 5-wave impulse against the Swiss Franc over the past 48 hours, starting from what I’m counting as the August 30 end of wave 5 pink to conclude wave 1 blue (at .82314). Also, beware that the entire move up from the August 9 Cheffy low also looks too much like a ABC zigzag with a triangle for wave B to inspire complete confidence in a count of 5-waves up, although that wouldn’t exclude a possibility that the up move from August 9 was wave 1 of a bullish leading diagonal. If this downward small impulse over the past 2 days from .82314 is going to be wave A of a zigzag for wave 2 blue (as depicted above), USD/CHF cannot move back above .82314 before completing at least one more 5-wave move to the downside. This should buy a bit more time in scoping out the entire dollar picture.
Many professional traders use the Franc as confirmation of larger trend changes in the Dollar. With what can be interpreted as 5 waves up from the August 9 bottom already in place, I’m therefore patiently waiting for a wave 2 zigzag to complete, while continuing to examine the wave structure of all of the Dollar based currency pairs, before committing fully to a new trend of dollar strength. Wave 2 can theoretically retrace all the way to the start of wave 1 at .70658, but not beyond. I’m going to say that movement above .82396 in the USD/CHF currency pair should finally confirm a trend change from down to up in the US Dollar vs. the Swiss Franc. At that point, the dollar will have a long way to go based on my wave count . . . to at least 89.63 in the US$ Index.
One more quick note: I’ll be on vacation over the Labor Day weekend, so the next live weekend webinar will be on Sunday, September 11, at 9am. Thanks, and see you soon . .