Executive Summary
- USD/CHF’s rally is viewed as a temporary bounce
- Wave relationships exist between .8640-.8650 to complete wave 4
- Wave 5 would carry USDCHF to below .8375
How Much Higher Could USD/CHF Rally?
Earlier today, a robust US jobs report propelled USD stronger driving USDCHF higher.
Under the current Elliott wave model we are following, the rally in USDCHF may prove temporary.
Back on August 26, we forecasted:
“..we are anticipating USDCHF to continue softening in the coming days, possibly reaching .8350 – .8422 to finish off a fifth wave.” Swiss Franc Elliott Wave: USD/CHF Melts Like Chocolate
Three days later, on Aug 29, USDCHF did dip to .8400, then briefly reversed higher. Then September 6, another retest produced a low of .8375. Both jabs were right within the target zone.
Since then, USDCHF has been trading in a sideways range until this morning’s robust jobs report.
Back in August, we forecasted the depth of the rally too. On August 26, we stated:
“If USDCHF does rally, it may carry higher to .8600 – .8700 and is considered wave 4 already underway.”
Today’s high reached .8608 so wave 4 is close to terminating (if it hasn’t already).
Allow a little more upside potential to .8640-.8650, partly where the 38.2% Fibonacci retracement of wave 3 sits.
A break below .8501 will be deep enough to signal wave 4 is over.
Bottom Line
USDCHF has reached the target zone previously forecasted of .8600-.8700 and is at risk of a bearish reversal.
Once the wave 4 top is registered, then wave 5 would commence to the downside reaching new lows below .8375.
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