USDCHF Impulse Forex Wave Pattern Starting – Oct. 28, 2014

USDCHF Impulse Forex Wave Pattern Starting - Oct. 28, 2014

USDCHF Impulse Forex Wave Pattern Starting - Oct. 28, 2014

A simple forex wave pattern retracement play is evident on USD/CHF’s 1-hour time frame, as the pair has retreated to the 50% Fibonacci level and may be due for a bounce. This completes the recent corrective forex wave pattern from the .9550 area to the .9475 region.

Stochastic is pointing up but hasn’t been showing momentum for a strong climb just yet, indicating that a deeper pullback is still possible. In this case, USDCHF could retreat to the 61.8% Fib level, which is close to the .9450 minor psychological support.

Impulse Forex Wave Pattern

If the impulse forex wave pattern resumes, USDCHF could climb back to its previous highs near .9550 or perhaps make new ones until the .9600 levels. A downside break below .9450 though might indicate that the forex wave pattern is over and that a downtrend might be in the cards.

Event risks for this forex wave pattern setup include the upcoming release of the US durable goods orders figures, which might show respectable rebounds from the previous readings. Stronger than expected data could lead to strong dollar rallies while weak reports could lead to a prolonged selloff.

There are no reports lined up from Switzerland today, which suggests that risk sentiment might drive franc price action. Bear in mind though that pricing in ahead of the FOMC statement in tomorrow’s US trading session might take place as early as today, with most market participants anticipating dovish remarks from the Fed.

Weak dollar sentiment could drive USDCHF down to the previous swing low at the .9400 major psychological support, which might serve as a near-term floor. A drop below this area could lead to a selloff until the next support zone at .9250. On the other hand, an upbeat FOMC statement could renew dollar demand and push USDCHF back to its previous month highs near the .9700 major psychological mark.

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.