USDCHF Might Have Carved A Bottom Around 0.9380

01 July 2020

USDCHF structure is looking constructive for bulls and they must be inclined to resume rally towards 0.9900 levels at least. The currency might have carved a meaningful higher low around 0.6370/80 mark, and USDCHF is expected to remain higher from here on.

Let us have a look at the wave structure presented on the 4H chart here. The USDCHF had dropped towards 0.9180 lows in March 2020. Since then the currency has remained in control of bulls, carving a series of higher highs and higher lows.

The rally between 0.9180 and 0.9900 can be sub divided into 5 waves, making an impulse. It has been labelled as primary Wave 1 here. An impulse is usually followed by a corrective wave in the opposite direction, which labelled as A-B-C.

The drop between 0.9900 and 0.9500 was Wave A within the proposed A-B-C corrective drop. Please note that Wave B unfolded as sideways triangle consolidation and terminated close to 0.9750/0.9800 levels before resuming lower again.

Wave C resumed lower from sub 0.9800 levels and terminated towards the 0.9380 mark. Please also note that fibonacci 0.618 retracement of the previous rally was seen through 0.9450 levels. USDCHF dropped lower by 50-70 pips, before finding support again.

If the above wave counts are correct, USDCHF should remain in control of bulls and continue printing higher highs and higher lows from here. The projected targets remain way above 0.9900 mark as Wave 3 progresses higher. Also note USDCHF should remain above 0.9150 for the above structure to remain valid.

The above structure represents a classic 5-3 Elliott Wave pattern, which should be followed by another 5 wave move in towards the major direction, which is higher. Most traders might have initiated fresh long positions around 0.9400/50 mark, with risk below 0.9150 and target above 0.9900 respectively.

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