Triangle on USD/CHF is pointing higher

August 12, 2016 08:43 AM
Elliott Wave Analysis: USD/CHF

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 contratrend 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 making a new bullish turn up into wave V that should be made by three waves. If we are correct, then current triangle represents wave B-circled that can send price up into wave C later this summer.

USD/CHF, Daily

On the lower time frame, USD/CHF bounced nicely higher last week that we labeled as wave D) which is part of a big triangle formation. Triangles are made by five waves, so current turn down we see as just another temporary move; it's wave E) that may find a support later this week around 0.9700 region. From there, we will look for signs of a bullish turn in impulsive fashion back towards the upper side of a range.

USD/CHF, 4-hour

A Triangle is a common five-wave pattern labeled A-B-C-D-E that moves countertrend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five-wave affairs that subdivide 3-3-3-3-3.

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 He also is founder of forex services on provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: