GBP/CHF – 1.2615
GBP/CHF – Circle wave v ended at 0.9106 and major correction has commenced for subsequent gain to 1.5547.
Despite rising to 1.3069 earlier this month, the subsequent sharp retreat together with the breach of support at 1.2729 suggest top has possibly been formed there and consolidation with downside bias is seen for the fall from there to bring at least a retracement of recent rise to 1.2550-55, then 1.2490-00, however, break of support at 1.2440-45 is needed to add credence to this view and extend further fall to another previous support at 1.2285 but price should stay above 1.2215 support.
To recap the larger degree count, the selloff from 2.4965 (July 2007) is the beginning of wave V with circle and is labeled as 1: 2.3760, 2: 2.4425, wave 3 extension ended at 1.1470, followed by wave 4 at 1.5547, the quick rebound from 0.9106 suggests wave 5 as well as entire circle wave V could have ended there, hence consolidation with mild upside bias is seen for major correction to take place, bring initial test of 1.5547 (previous 4th of a lesser degree).
On the upside, whilst recovery to 1.2690-00 cannot be ruled out, reckon 1.2790-00 would limit upside and bring another decline later. Above 1.2860-65 would suggest first leg of decline from 1.3069 has ended, bring a stronger rebound to 1.3000 but said resistance at 1.3069 should remain intact.
Recommendation: Sell at 1.2800 for 1.2500 with stop below 1.2900.
For daily trade ideas, visit the Elliott wave daily section.
On the Monthly chart, the longer-term count is that major downtrend is under way with circle wave I at 2.8645 (Sep 1.978), then wave II with circle at 4.6175 (Feb 1981), the wave III with circle ended at 1.7425 (Nov 1995) and followed by wave IV with circle at 2.4965 (July 2007 with a short wave C) and wave V with circle has possibly ended at 0.9106. A monthly close above 1.5547 would add credence to this view, bring major correction to 1.7000, then towards psychological level at 2.0000.
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