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USDCHF is in a big pullback since the end of 2015, we see it as a corrective and temporary decline. Notice that the falling price action is overlapping which is evidence of a contra-trend movement. We suspect that the downtrend is limited, especially after we identified an ending diagonal in wave C-circled, the final leg of a big wave IV is evidence of a low in place following a recent bounce from 0.9440 area. Ideally, market is now at the early stages of a new bullish cycle; three waves up for wave V.

USDCHF, Daily

usdchf d

On the lower time frames, as said USDCHF made a very strong turning point last week from 0.9442 zone, where we see that the pair made a low, which means it completed wave 5) of an ending diagonal place in wave C-circled which is fully visible on the above chart. The reason for a low in place is an impulsive rally from the low; that’s a five wave pattern that confirms a change in trend from bearish now to bullish mode. Also, notice that the price is above the red trend line from where we may see a push up to 0.9794 and even higher after red wave 2) retracement.

USDCHF, 4H

USDCHF 4 (2)