EUR/CHF ? Bearish Correction ? Analysis Update

3 min read
HubertM

HubertM

Author

Dear Trader,

yesterday I analysed the EUR/CHF for a potential bearish correction and trade setup.

However the bullish price-action of yesterday changed the situation somehwat and today’s analysis will provide an update on the EUR/CHF outlook.

Bullish Momentum Changes Short-Term Outlook

Yesteday’s bullish price-action broke the first invalidation level (1.1670) of the bearish scenario i had outlined.

The 4 hour chart below shows how price broke above the moving averages again.

Bearish Correction Could Still Occur

My bias at this time is that the bullish move could be part of an extended Wave B, which would precede a deeper bearish drop. The chart also shows an updated wave analysis, which makes all the price movements since the low of Dec 1 part of a complex wave B (black). Given the large scale of the EUR/CHF  trend, a complex wave B like this is not unrealistic.

This mean that I expect price to form another ABC (turquoise) upwards, which could test the highs around 1.17 to 1.1730 before a sharper price drop might occur.

The nature of the price action over the next few days will be important as a gauge. The scenario for a wave B could be further strengthed if price shows signs of being partially corrective on its way up to 1.17, instead of purely impulsive.

If then another break occurs below the 21 and 144 moving averages of 4-hour chart, the likelihood of the bearish correction becomes much higher.

So for the time being patience is needed until we gain more information from the price-action of the days ahead.

 

All the best along your trading journey…
Hubert
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