GBP/CHF Elliott Wave Analysis

GBP/CHF - 1.6108

GBP/CHF - Wave 4 correction from 1.5122 has ended at 1.8114.

Sterling fell according to our previous update and met indicated downside target at 1.6317 and 1.6118 and the breach of latter support signals wave ii from there has ended earlier at 1.7113, hence wave iii has commended and further weakness to 1.5990/95 would be seen and later to support at 1.5849.

To recap the larger degree count, the selloff from 2.4967 (July 2007) is the beginning of wave V with circle and is labeled as 1: 2.3763, 2: 2.4429, wave 3 extension ended at 1.5122 (sub-divided into i: 2.3490, ii: 2.4209, iii: 1.9605, wave iv: 2.0359 and wave v: 1.5122). Our preferred count remains that wave 4 from 1.5122 has ended at 1.8114 with a: 1.7486, b: 1.5849 and wave c at 1.8114.

Under this count the decline from 1.8114 to 1.6118 is the wave i of 5 and wave ii has ended at 1.7113, so wave iii of 5 is underway and would extend weakness to support at 1.5849 and later to next minor support at 1.5647 probably later this month (we indicated in our previous update at late Q1 2010).

On the upside, expect recovery to be limited to 1.6200 and resistance at 1.6293 should remain intact and bring such a decline. Only a daily close above this resistance would defer and bring stronger rebound to 1.6400 but price should falter well below resistance at 1.6592 (previous support turned resistance) and sterling shall turn back south from there.

Based on ActionForex.com Technical Outlook