Elliott Wave Analysis: USDCHF Searching For A Base; A Reversal May Be Near

By: Gregor Horvat | Thu, Jan 26, 2017
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USDCHF was in a strong uptrend in the last few months of 2016, so recent sideways price move since mid-December is just another correction or pause within uptrend. We see it as wave 4) that seems to be unfolding as a complex correction, with sub-wave C showing qualities of an ending diagonal. As we can see on the updated chart, current bearish intraday movement suggests price trading in final parts of blue wave v of C, that will ideally find some support and make a new turn higher around the lower line of an ending diagonal.

A five wave move to the upside towards 1.0249 level would indicate that bulls are in control.


USDCHF, 4H

USD/CHF 4-Hour Chart

The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves.


Basic Ending Diagonal:

Idealized Basic Ending Diagonal

 


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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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