Triangle on USD/CHF points higher

September 2, 2016 09:01 AM
Elliott Wave Analysis: USD/CHF

On the 4-hour chart of U.S. dollar/Swiss franc (USD/CHF) currency pair, we are looking at a triangle count, which now shows wave E) in progress, after recent three-wave move to the upside was recognized as wave D). As such, this new sharp reversal down may be wave A, the first leg of a three-wave set-back in wave E). A probable reversal zone and support area for this wave E) could then be around the 61.8 Fibonacci ratio.


USD/CHF, 4-hour


USD/CHF, Daily

 

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 into 3-3-3-3-3.

A basic triangle pattern: 

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 TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/