The USD fell sharply down yesterday, but it made only a third leg of a decline within a corrective pattern across the board. On the USD Index, we labeled the decline as an A-B-C structure that can be near completion. Ideally we will see a bounce in an impulsive fashion back to 96.84. But it’s important to wait on this overlap before we can look for any long USD opportunities. An overlap would confirm the bullish price action as the decline would be treated as a complete zigzag.
USD Index 30min Elliott Wave Analysis
If we are correct, then EUR and CHF will turn bearish. But now we will rather look at the USDCHF pair because CHF is weaker than EUR, which means that any dollar bull trend may be stronger on USDCHF rather than on EURUSD. On the hourly chart of swissy we see a nice, almost perfect three wave set-back from the 0.9542 high. Notice that the price is now trying to bounce from the lower side of a corrective channel. Ideally the price will recover in an impulsive fashion back to 0.9430 for wave 1. If we get that move, then a bullish set-up will follow in wave 2 retracement.
USDCHF 1h Elliott Wave Analysis
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