USD/CHF: Skewed triangle is completed – A good signal for sales
In the long term, the USDCHF pair can build a primary corrective trend – a triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. Its final part, wave Ⓩ, is under development.
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It is assumed that the wave Ⓩ may end in the form of a standard intermediate zigzag (A)-(B)-(C). Wave (A) is a 5-wave bearish impulse, wave (B) is a skewed triangle that looks finished.
Usually, after the end of a skewed triangle, the trend continues to move in the same direction in which it moved before the beginning of the triangular pattern, in our case downwards. Thus, the formation of the final intermediate wave (C) can be expected in the near future.
Using the Fibonacci extension, the potential end of the wave (C) is determined. Most likely, it will be at 76.4% of impulse (A), and will end near 0.856.
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Let's look at an alternative scenario. According to this view, the development of correction (B) can be continued. Perhaps it takes the form of a flat A-B-C.
At the moment, two parts of the potential flat have been completed – the minor sub-waves A and B. Both of these sub-waves are similar to double zigzags of the minute degree ⓦ-ⓧ-ⓨ.
To confirm this scenario, the last part is needed – impulse C, and perhaps the price has already begun to climb up within this impulse.
It is likely that the impulse C will end near 0.953, located on the resistance line.
Author
Jing Ren
Orbex
Jing-Ren has extensive experience in currency and commodities trading. He began his career in metal sales and trading at Societe Generale in London.
