Forex Technical Update

Prev: Fibonacci Expansion Targets for the Fearless USD/CHF Bears (8/2)

USD/CHF
USD/CHF 8/4/2011 1H Chart
ABC Correction:

- After taking actions against the appreciating Swissie, we saw a rally in the USD/CHF.
- Today, a day later, we see this rally completing an ABC correction. The market is holding this rally below 0.78.
- The wave equality projection goes to about 0.7813. If we have another near-term rally above 0.78 and is capped near 0.7815, we would be complete with a Gartley. In Elliott Wave terms, the structure would represent a zig zag.
- Essentially, the market is waiting to fade USD/CHF as always. It may be a bit tentative at the moment, what with BoJ intervening as well, and making the word intervention a psychological barrier for the fearless bears.
- A break below 0.7730, and a hold below this level should signal a bearish continuation at least back towards the low just a hair above 0.76.
- On the other hand, if the market fails to hold below 0.7730, it has a chance to extend the zig zag towards 0.79 area, near 150% expansion, and the 200SMA.
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Can the Swiss Franc keep going since the SNB is "dealing" with the high currency level and not really trying to intervene in the traditional sense? Subscribe and become a member to share your views and join live discussions as well as webinars about the markets.

Fan Yang CMT
Chief Technical Strategist
FXTimes