(FOREX:USDCHF): Sharp reversal in 2011 from 0.7000 area is impulsive leg, and we know that impulses show direction of a current trend. As such, we think this pair is now bullish for minimum three-wave rise; A)-B)-C). In the last few months we have seen a slow and choppy price action in 0.8900-1.0000 range, which now seems to be a contracting triangle placed in wave B). We can already count five waves within this pattern so traders must be aware for a push higher into wave C) later this year.
USD/CHF Weekly Elliott Wave Analysis
On daily chart, contracting triangle is now in final stages. We are tracking a wave E that may be looking for a support around 0.9050-0.9200 zone. An impulsive bullish reversal in price back to 0.9700 will put USD in bullish mode against Swiss franc for a push above parity.
USD/CHF Daily Elliott Wave Anaysis
What is Triangle Elliott Wave Pattern?
A Triangle is a common 5 wave pattern that is labeled A-B-C-D-E. Triangle moves counter-trend. It 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.
- Structure is 3-3-3-3-3
- Each subwave of a triangle is usually a zig-zag
- Wave E must end in the price territory of wave A
- One subwave of a triangle usually has a much more complex structure than others subwaves
- Aappears in wave four in an impulse, wave B in an A-B-C, wave X or wave Y in a double threes, wave X or wave Z in a triple threes