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USDCHF Elliott Wave Analysis – Trading Lounge

U.S. Dollar / Swiss Franc (USDCHF) – Day Chart

USDCHF Elliott Wave Technical Analysis

• Function: Bearish Trend
• Mode: Impulsive
• Structure: Orange Wave 3
• Position: Navy Blue Wave 3
• Next Higher Degree Direction: Orange Wave 4
• Wave Cancellation Level: 0.90364

Analysis Overview

The USDCHF Elliott Wave Analysis on the daily chart reflects a bearish trend, indicating strong downward momentum. The market is currently in an impulsive phase, with orange wave 3 developing within the broader wave structure. This wave 3 is positioned within the third wave at the navy blue degree, reinforcing the bearish sentiment.

The prior corrective phase (orange wave 2) appears to have completed, signaling the continuation of orange wave 3. This phase is expected to extend further downward before transitioning into orange wave 4, which would serve as a corrective move against the prevailing downtrend.

Key Trading Insights

• Traders should monitor critical price levels.
• The invalidation point is set at 0.90364 – if the price moves above this level, the current wave structure becomes invalid.
• A breach of this level would require a reassessment of trading strategies.

Currently, USDCHF remains in a strong downtrend, with wave 3 actively playing out. The Elliott Wave structure suggests further declines before a potential corrective phase begins. Monitoring price action and wave formations will be crucial for identifying future trading opportunities.

U.S. Dollar / Swiss Franc (USDCHF) – 4-Hour Chart

USDCHF Elliott Wave Technical Analysis

• Function: Counter Trend
• Mode: Corrective
• Structure: Gray Wave 2
• Position: Orange Wave 3
• Next Lower Degree Direction: Gray Wave 3
• Wave Cancellation Level: 0.90364

Analysis Overview

The USDCHF Elliott Wave Analysis on the 4-hour chart presents a counter-trend scenario, indicating a corrective mode in the market. The price is currently in gray wave 2, forming part of a larger corrective structure within orange wave 3. This suggests that the market is undergoing a temporary correction before potentially resuming the broader trend.

The previous gray wave 1 appears to have completed, and the market is now transitioning into gray wave 2, which is expected to exhibit sideways or upward movement before the impulsive gray wave 3 begins. The completion of gray wave 2 is a key signal for traders, as it may indicate the start of the next downward move in gray wave 3.

Key Trading Insights

• Wave 2 corrections often involve consolidation or mild retracements before the continuation of the larger trend.
• The wave cancellation invalidation level is set at 0.90364—if breached, the current wave count becomes invalid.
• A break above this level would suggest a need to reevaluate the market structure, as it could indicate a shift in trend or wave pattern.

Currently, USDCHF remains in a corrective phase, with gray wave 2 in play following gray wave 1’s completion. The next anticipated movement is gray wave 3, which could resume the downward trend. Traders should closely monitor the completion of gray wave 2, as it will provide insights into potential entry points and market direction.

This analysis highlights the importance of recognizing wave structures to predict market movements and optimize trading strategies.

Technical Analyst: Malik Awais

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