As the USD continues to benefit from recent fundamental cues in Swiss referendum against propping up its central bank gold reserve, the pair has defined an advanced market geometry in Bill Wolfe's Wolfe Waves pattern:
WOLFE WAVES POINTS:
This pattern works remarkably well with discreet projection of its 2-4 Line off of Point-3 to trace the course of an adverse excursion towards the definition of Point-5-prime, or off of Point-1 to define point-5-second - See dashed line off of Point-3 as a dynamic resistance against any price excursion above the 1-3 Line.
Another point of highest interest provided by another line projection is that of the Take-Profit Line. The TP Line is simply projected as an alignment to points 1 and 4 (dotted Line).
In my empirical experience, I would estimate that this geometry tends to define Point-5 -prime (2-4 Line projection off of Point-3) more often than Point-5 (1-3 Line validation), whereas Point-5-second has the lowest occurrence rate.
GEOMETRIC PATTERN INTERPLAY:
Note that point-5 of the Wolfe Waves pattern (WW) is ghosted, as it remains undefined as of this writing.
Similarly, in Elliott Wave terms, a larger-degree 1-2-3-4-5 bullish impulse is nearing completion of a 5th wave geometry (expecting a Ending Diagonal to possibly occur off of Point-3 of the distinct WW).
PREDICTIVE?FORECASTING MODEL:
Independent of the geometry-based price projections, the predictive/forecasting model offers the following targets:
1 - TG-Hi = 0.98048 - 02 DEC 2014 - Low probability attainment; High-probability reversal
and
2 - TG-x = 0.99144 - 02 DEC 2014 - Extreme target (rarest; occurs in over-stretched markets)
OVERALL:
Current direction remains bullish. However, analysis suggests a near-by reversal potential as defined above. Wolfe Waves pattern (WW) should remain the measure of Take-Profit along its 1-4 Line below.
Watch for significant R/S influences from WW's Point-3 @ 0.97408 and poin-4 @ 0.93589.
Hi David. With the dollar weakness expected across the board, as reflected on your other analysis, where do you see the bottom for this pair?, Thanks, Hamed
First of all, what just occurred to the USDCHF is merely a technical reset triggered by fundamentals to which we might never be privvy (some say that European periphery countries may have been baited to by CHF as a way to fund their economies, so that once the CHF rose to above 30% against the USD, it permitted a "rescue" funding that would have bypassed the need for a more complicated and unpopular rescue package, as Greece for instance had received in the past, which caused a public outcry and vented the flames of anti-european sentiments - In this method, the larger economies must have known about this, and their acting as a surprise would simply be bogus).
If this fundamental method of funding a rescue package (or what ever other reason) is true, it still appears quite desperate and perhaps the only solution. Still, the market makers have to constantly steer against the random pacing and marching of the market, and impose a "mechanical gait", which I use in my forecasts. In this case, I had already forecast the MINIMUM move by simply defining numerical targets (TG-1 and TG-2), which as you know are low-level of resistance, but instead tend to define FUTURE resistance/support or pivot points.
As the pair moved on cue and in the direction of the forecast, it hit the two numerical targets in no time. However, what I left out of the chart was the usual nominal targets, namely: TG-Lo/Hi and their matching extremes: TG-Lox/TG-Hix (also written as TG-x relative to where the price stands) - Here too, as you know, these targets represent low-level of attainment (as opposed to the high-probability attainment of numerical targets), and high-probability reversal (as opposed to the numericals, which do NOT impose any reversal, but only retracements in the typical order of 0.382 up to 0.618-Fibonacci levels).
I will share the nominal targets at a later time. However, it might sound a bit "after the fact" if I said to look for lower lows, since this event has already occurred. Yet, the depth of which remains measured and paced "off of the price field" and independent of the current price action, although the use of Fibonacci in the WEEKLY and MONTHLY charts will help the advanced EW and Fibo trader to define a plausible range.
I am sorry to remain cryptic at this point, as I can only share this target with some of my clients, although I do enjoy the technical explanations and the hints.
Let me simply say that USDCHF remains a full-force bull at the institutional level, based on the predictive/forecasting model. There are currently TWO limit orders defined by banks, and the range are simply two narrow to suggest that price will depart either below or above the current range defined by the month-base bullish swing (despite the recent technically-allowed retracement).
Still, the model suggest that in the long term, this pair remains BULLISH and the targets are above the recent bullish swing - I would not necessarily associated the USDollar trend with this USDCHF pair though.
David Alcindor
4xForecaster
⋅
08 JAN 2015 - Update:
FYI - I shorted this pair with a front at 1.02121 aiming for targets defined in the field. The WW was heavily distorted. The recent fundamental did not play in the penultimate target of 1.02121 (not originally defined, but could have been estimated using WW's 5-prime and 5-second points projection, as defined on the dashed blue lines).
If price rallied any higher, I would simply ignore this chart, as too much distortion in the WW should prompt the trader to give up the timeframe and let it fall under the daily control (likely banks adjusting positions).
David Alcindor
4xForecaster
⋅
ADDENDEUM - Note also that a major bank just exited its long position, suggesting an intented top exactly at 1.02000.
Any interest to short this pair should be based on a personal knowledge of technicals and fundamentals.
A VERY conservative target for this possible short would be the level of Point-4 of the distorted WW (in Blue), which is why I defined this discreet structural level as my TG-1.
NONE of the targets (TG-1 or TG-2) have been defined by the predictive/forecasting model as of YET. Once the model offers a solid set of bearish targets, I would likely post and share on Twitter. For now, this remains a "pocket trade", so to speak, shared only on TradingView.
David Alcindor
4xForecaster
⋅
19 DEC 2014 - Quick Note:
Rallying into forecast TG-Hi stomped into a small consolidation. Less-probable TG-x remains open, as is the possibility of a 5-prime completion.
Nonetheless, dominant bearish features of this complex geometry are likely to overcome price action back towards point-4 or lower, along the 1-4 Line.
David Alcindor
4xForecaster
⋅
15 DEC 2015 - Update:
From Twitter:
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USDCHF rolled from target hit at 0.98048; TGx is low prob; WW's 1-4 TP Line pending:
From Twitter:
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USDCHF hit both target in one sweep: Look For possible triple-bot:
@TradingView USD CHF #forex
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David Alcindor