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.
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: