USD/CHF Breaks Below 1.09; Implication on Elliott Wave Count

• Weekly and Daily: The USD/CHF has been essentially in a free-fall since topping near 1.17 as anticipated. The strength of this decline however comes as a surprise, and the extent is farther then expected.
• The weekly shows that we may be in or completed a c wave. The low in 2008, below parity may be the end of a wave V, which means end of wave (C). However, if it is only wave III, end of wave (C) should be back below parity, as wave V should surpass alt wave III, which is also just below parity.
• In any  case, looking at the daily, we see that the pair is breaking below 1.09. Last week, I proposed that if the preferred count was correct, 1.09 should not be broken. I said there should  be bottoming action near this level. There may be some elbow space, since to be specific, the pair should not CLOSE below 1.0840.
• This is not done, but is looking very likely.
• This makes the preferred count invalid. My other count, the “extended fifth” scenario. This means, that we are in a correction of a completed wave v. The guide for a correction leads down towards 1.05 area.
• The RSI breaking below 40 and 30 shows bearish strength. If the market closes below 1.0840 today, it is possible it can extend to 1.05. Note that the market is testing a rising trendline in the daily, and may respect at least in the short-term.

Fan Yang
Currency Analyst
Commodity Trading Advisor

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