USDCHF: Triangle Pointing To The Upside; Bullish Momentum Could Follow

By: Gregor Horvat | Mon, Oct 26, 2015
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USDCHF has been moving sideways since end of March. We see five price swings between two trendlines that reminds us on a triangle formation. That's a five wave A-B-C-D-E pattern that occurs in the direction of a trend, so it's a continuation formation that suggests more upside for USDCHF. In fact this bullish trend continuation may resume very soon after recent bounce from 0.9470 and towards the upper resistance line. Move from the last few days is sharp, so break above the trendline may not be far away which will confirm a bullish run for the USD against the Swiss Franc. We see 1.0000 coming, but then even 1.0300-1.0400 in months ahead.

USDCHF, Daily

USDCHF Daily Chart

USDCHF has finally broken to the upside, out of a downward channel that lift prices up to 0.9740 as expected. We see current leg as wave (3) of a new bullish impulse so more gains should follow ahead, especially after a wave four pullback that can take place in the next few sessions.

USDCHF, 4H

USDCHF 4-Hour Chart

A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. Triangles are overlapping five wave affairs that subdivide into 3-3-3-3-3.

Basic Triangle Pattern:

Idealized Basic Triangle Pattern

 


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Gregor Horvat

Author: Gregor Horvat

Gregor Horvat
www.ew-forecast.com

Gregor Horvat

Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time.  His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.

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