USDCHF: Elliott Waves and Dovish SNB Are Pointing Higher

2. Juli

USDCHF turned higher this year, after breaking some important trendline connected from 2022 highs on a daily chart, where a breakout can lead to higher prices within a big triangle range. One of the reasons why Swiss franc is that weak compared to others is because SNB surprised and cut rates twice after inflation has softened. So as long as FED sticks to current rates, USDCHF may do well, but this cycle may change later this year when FED finally cuts if data convince them that inflation is back at normal levels again. But for now, we have to focus on the current trend and pattern which seems to be pointing higher, on USDCHF.

Looking at the 4-hour chart, it looks like pair recently pulled lower into a higher degree corrective setback, temporary (A)-(B)-(C) corrective decline, where wave (C) appears completed because of five subwaves down from wave (B). We also see some nice reactions higher, from new low and back above 0.900 where overlap confirms the resumption of an uptrend. However, there can be some intraday setback as pair comes into a channel resistance now, near 0.9050. But sooner or later we think the channel will be out and more upside ahead, while the market is above 0.8826, the short-term invalidation level.