GBPCHF completed an important reversal pattern downside and price is making a corrective bullish run. The long term bearish trend could continue at the end of the correction for 1000 Pips or more. How can a long term trader or investor take advantage of this technical possibilities?. The following give clues based on 5 July GBP CHF Elliott wave analysis.
05 July, AtoZForex - Elliott wave theory shows the spiral nature of the market. Patterns in smaller time frames come together to form same patterns on larger time frames. This means that, with Elliott wave theory trade opportunities will be seen on every time frame. Impulse waves, triangles etc are not exclusive to any time frame. On this platform, we have spot Elliott wave patterns on 15 minutes, 1 ,2,4 hours and daily time time frames. Though the larger time frames seem to be more accurate as they absorb intraday noises and focus more on market opens and closes, the smaller time frames are quite good as well. This article will discuss a trade forecast/setup on GBPCHF from the daily chart.
5 July GBP CHF Elliott wave analysis: Weekly Time Frame
GBPCHF Elliott wave analysis, Daily (click to zoom)
The weekly chart above shows how price behaved from the beginning of this millennium. A clear impulse wave is exhibiting. Impulse waves as we know are non-overlapping five waves. The direction here is downside. The BREXIT, EU members debt crises , UK election this year, the 2008 economic turmoils and many other events that happened in the 17 years of this millennium were subsumed in the impulse wave. It's no more debatable that Elliott wave is the right tool to understand how markets behave and will behave in the future by just looking at the charts. The impulse wave might not have completed yet. There is still a high likelihood of one last push to 1.0 or below. The events that will call for this are not known yet but we know that's a high likely occurrence.
If we analyze the market from the higher time frame - daily and weekly, fundamental, economic and other critical events may be the least of our worry. How far has the 5th wave move?. The chart below shows the daily view.
5 July GBP CHF Elliott wave analysis: Daily time frame
GBPCHF Elliott wave analysis, Daily (click to zoom)
The progress of the 5th wave on the weekly chart is shown above. Price has completed the 4th sub-wave of the 5th wave at 1.307. A dip to 1.16 and 1.07 or 1.0 could be seen in the coming months. How can long term traders take 1000 Pips from this?.
GBPCHF Elliott wave analysis, Daily (click to zoom)
The chart above shows the sell zone with stop loss above 1.307 and targeting 1000 Pips. A break above 1.307 will invalidate this setup. This risk (in pips) is high , so proper lot sizing should be done to avoid over-trading. More updates later.
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